The global business fraternity is recognizing the benefits of using virtual data rooms in different domains. From private equities to the healthcare sector, online data room software has become the new face of the safest data sharing and management practices. The global virtual data room market is expected to reach about $5,500 million by 2030, growing at a CAGR of 14.73%.
However, as the demand for virtual data room software rises, the competition increases as well, and it has its perks and drawbacks at the same time. For example, buyers are more likely to get a wide range of options, but at the same time, fraudulent activities can create chaos for uninformed buyers.
If you are in search of an electronic data room for your business but don’t know where to look, the guide below will settle most of your ambiguities.
Here are some most important things to consider when selecting the software for your needs among the best data room providers.
1. Identify your needs
Virtual data rooms are essentially online document repositories handled by certified virtual data room providers. Businesses use data room services according to their needs. Some use it for external communication and deal-making, while others use it as a virtual workspace or for board communications.
Before you invest in data room software, it will be helpful to pen down the business needs that urged you to make this decision. For example, you can start with questions like:
- How will a virtual data room improve your data management practices? Is it security that you are looking for?
- Which department or how many people will use the VDR?
- Are you planning to use it temporarily or permanently?
- How much data storage capacity will be enough?
- Is your workforce tech-savvy? Can they easily shift to cloud solutions?
- What type of data room security do you need?
These questions will form a foundation for better and well-planned research when comparing data room vendors. Additionally, you can run a comprehensive data room comparison at https://datarooms-review.com/ — a reliable platform with unbiased virtual data room providers’ reviews.
2. Consider virtual data room security
If you make a list of your priorities in choosing a data room, always prioritize data room security. There are many data room providers in the market, but they all offer different security measures to manage sensitive corporate data. Here is what you should know about VDR security.
The first and most important thing is to check if the vendor has been authorized by the concerned regulatory authorities. For instance, data room vendors operating in the financial sector and brokerage industry in the US must be FINRA-certified. Important certifications include ISO and SOC, while regional and industry-relevant certifications include GDPR, FISMA, and HIPAA.
Mandatory security features
The list of data protection features is long, and it costs more money if you want all of them. Therefore, choose security features as per your needs. For example, the fence-view feature is mandatory for external data sharing in M&A, IPOs, capital raising, etc.
Other vital features include multifactor authentication, data encryption, document access controls, and digital watermarks.
3. Review virtual data room pricing
Data room pricing is another crucial element in the data room selection process. The pricing system varies from vendor to vendor, and every model has its benefits and drawbacks. Here is what you should know about data room pricing approaches.
- Per-user pricing. Vendors following this approach charge you for the total number of users (administrative or guest) added to the data room. The data storage capacity varies with the package.
- Per-page pricing. In per-page pricing, the buyer is charged for uploading or saving a total number of pages in the VDR. If a file has 10 pages, you will be charged for all of them.
- Storage-based pricing. You can also choose to pay for the total data storage capacity you consume.
- Flat monthly pricing. Most providers charge a flat monthly fee, and in return, they allow you to add a specific number of users, create projects, and use a specified amount of storage depending on your package.
4. Check the vendor’s background
It goes without saying that you would want someone experienced to handle your highly confidential information. However, the type of experience needed in this field is slightly different. Here is what to do.
Inspect digital presence
Any globally recognized data room vendor such as iDeals, Merrill, or CapLinked has a massive digital presence. You can find these vendors in every renowned software review platform. Make sure your desired vendor has a digital presence.
Search for industry-relevant experience
Data room services have become industry-specific. For instance, vendors like DealRoom or Merrill specialize in M&A, while iDeals is well-known for serving the legal sector, healthcare, and financial industry. Make sure your vendor knows your industry well.
By choosing the best virtual data room, you ensure a flawless and beneficial experience. To do so, you should clearly identify your needs, consider virtual data room security, review the pricing structure, and inspect the vendor’s background.
A well-informed decision in selecting a data room vendor will unfold the true potential of technology. Some of the best data rooms to consider include iDeals, SecureDocs, Merrill, CapLinked, Firmex, FirmRoom, and Ansarada.