What Is a Virtual Data Room?

A virtual dataroom is a cloud-based repository that lets multiple users store and share documents. Typically, VDRs are used during M&A transactions and other business processes but can also be beneficial for internal collaboration as well as for storage of data.

Contrary to physical file sharing services, VDRs provide 24/7 secure access for users who are authorized. They often come with workflow automation tools and collaboration features that allow teamwork and increase efficiency. Most well-established online data rooms offer the full range of administrative services including scanning and translation of documents as well as data migration at a cost.

The industry of immovable properties uses VDRs to share a variety of documents with buyers and investors. The high level of security that these platforms provide is vital, considering that many sensitive financial information can be shared. Many litigation processes also require a high degree of confidentiality.

Some traditional VDRs require users to download desktop software or plugins to access certain security features. This can delay the transaction process and stop potential buyers or partners from even accessing the data.

A modern online data room can contain granular access control, real-time vector watermarking and classification labels to safeguard sensitive files. Additionally, it will detect abnormal behavior such as downloading without authorization or malware detection in order to prevent attacks. It is also able to integrate with popular productivity software like project management tools and communication platforms in order to improve collaboration and remove the need to switch between several applications.