What Is a Data Room and the Benefits of Going Virtual?

by Josh Biggs in Tech on 25th April 2019

Have you found yourself having a storage space issue when it comes to your proprietary data? If you are chances are it’s because you have a physical data room.

What is the data room? A data room isn’t referring to your communications room, rather this is the room where your physical data files are kept. These are all those binders with past financial reports, invoices, business plans, etc… All the information about every aspect of your company in one room.

And now you’re running out of the room. Thanks to the advent of cloud technology software as a service (SaaS) has come to the rescue.

Virtual Data Room. A virtual place online where data can be stored and accessed by anyone with the right permissions. There are many more benefits to having a virtual data room than saving space though.

Data Protection

One of the biggest fears and concerns facing businesses wishing to transition is data security. With major companies being vulnerable to cyber-attacks, how can you ensure your company’s information and your client’s or customers is safe?

The truth is a virtual data room is the most secure place for your important files and data. Since your files are converted into data and stored on a server there is no need to worry about loss due to fire, flooding, or natural disaster. This alone could potentially save thousands in costs due to loss of physical files.

For data security needs each provider will need to be researched and interviewed to determine which will best meet the company’s needs. However, typically providers offer a guarantee of protection as well as added security features like watermarks, create authorizations and permissions, and scan for malicious software.

Share and Organize

Efficiency and productivity both rely heavily on organization and communication. Today with the internet and more remote work positions available, sharing is included.

Businesses need to have their data well organized and easy to access from anywhere. Virtual data rooms offer that ability. Because virtual data rooms are considered a SaaS, a cloud-based system, the files can be accessed from anywhere with an internet connection.

This makes it easy for businesses to share files with employees in locations all over the world. Likewise, employees who are traveling can still access their files and information.

Check with various providers to find out which one will best meet the needs of the company.


One of the many benefits beyond data storage, protection, and organization, virtual data rooms also offer feedback. Or, more aptly put, they can generate reports.

These reports can help with tracking the performance of other parties. The reports generated from this data can be made according to the party’s interest and activeness. This can help during negotiations with potential partners in the future.

Even while closing current deals these reports could provide leads to new business partners in the future.


When it comes to mergers and acquisitions transparency is key. By transitioning to a virtual data room it becomes easy to make readily available any all files or data needed.

Virtual data rooms also allow all interested parties to receive alert notifications with any updates. This keeps everyone in the loop and helps to ensure a smooth process overall.

Virtual Data Rooms

What is the data room? What is a virtual data room?

These are questions that should have answers now. Along with clearing up what a data room is, fears and concerns about security and benefit should have been assuaged.

While the security concerns will always exist, they will always exist for both the physical and the virtual world. What makes virtual data rooms so beneficial for businesses is the added features.

With a virtual data room your data will be stored in a cloud server, protected with up-to-date data security, and accessible from anywhere in the world.  Virtual data rooms also provide feedback on how interested investors or new partners may be, as well as making transparency possible during mergers and acquisitions.

These are by no means all the benefits available, there’s the lowering of costs for storage space, onsite security personnel or equipment, and even saving on man-hours.

Virtual data rooms provide a safe and secure location for a business’s proprietary data and making it easily accessible for anyone with permission from anywhere.

Categories: Tech