Difference between Data Room and Virtual Data Room?

In this article, we will discuss the main peculiarities that differentiate Virtual Data Room and Data Room options.

Why we choose VDR?

Today we can observe a great interest in the problem of big data, associated with the constant growth of the volume of received structured and unstructured information. On the one hand, processing and analyzing such data is not an easy task, but on the other, it offers huge analytical opportunities, for example, in the field of evaluating business partners.

With the increase in the amount of data entering the network every second, the importance of virtual data rooms – and therefore a better understanding of the benefits they bring – becomes vital.

A virtual data room is a comprehensive solution that must be scalable and secure. The main element of a virtual room is the security of the environment, which is provided primarily by user authorization. Depending on the server vendor, some create numerous copies of your data and generate it in disparate locations to ensure that it is not destroyed or unavailable in the event of a disaster, while even the companies providing the data do not have access to your data, original documents, and files, as well as other people outside the premises.

There are several purposes for which companies use data rooms, including:

  • Mergers and Acquisitions – Virtual deal rooms are often used during the M&A phase as a place to post and exchange thousands of documents with different teams, such as potential buyers and sellers.
  • Fundraising – Companies may share confidential company information with potential investors when raising funds.
  • Strategic Partnerships – Potential partners can use virtual data rooms to give each other access to important files and data that relate to each other. They can also set specific permissions so they know who has access to what.
  • Board Communication – Teams can communicate securely in virtual data rooms regarding various aspects of the transaction lifecycle. Teams can also secretly invite external users to chat inside the room.
  • Secure File Sharing – Virtual Data Rooms are used to store unlimited amounts of data.
  • Consulting – Confidentiality, and confidentiality are top priorities for consulting companies that require a controlled environment;
  • Manufacturing – Manufacturing industries use VDRs to exchange new designs or product data.

What is the difference?

A traditional data room is usually one or more rooms filled with paper documents with a clear timetable of visits. A virtual data room is an Internet site that solves the problem of simultaneous access to documents and provides an opportunity for authorized visitors to work with documents from where and when they want.

The reader can independently compare the costs of renting and organizing offices and the physical movement of employees in space, on the one hand, and renting a virtual space, on the other.

In the first case, its requirements include ensuring strict control by “people in civilian clothes” and the need to take into account the notorious human factor. In the second – virtual – there are ready-made technologies for data encryption and personalized access.

As for data room work in the room is carried out in the presence of a representative of the selling company.  You must obtain permission to copy documents.

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