When exchanging sensitive data within or between enterprises, not only speed or packet size are important, but also security. Virtual Data Room is a solution. In this article more about it.
Virtual data room: why it is the future?
Modern companies and organizations operate in a large amount of constantly changing information, which must be promptly analyzed and based on the right decisions. Computer technology and information technologies are rapidly developing. Today, the success and profitability of the company depend on the level of IT development, speed and quality of information processing, and the soundness of decisions.
Today, electronic document management is becoming increasingly important. That is why most companies choose virtual data rooms (VDRs) for their working process. Companies are increasingly using VDRs for the exchange of confidential information such as contracts, research, and development results, or projects in which several parties are involved.
The Data Room is a protected web system (internet storage space) in which confidential and non-public documents and information can be stored and forwarded between clients and third parties for faster and more efficient document due diligence.
The structure of a Data Room
These services offer real-time data exchange in various forms. Some come with built-in video or audio chats, allowing customers to communicate directly and effortlessly using their own devices. VDRs also receive and transmit data in the form of documents, which should only be opened by certain individuals. Once the VDR is closed, the cloud service erases it without leaving any traces, reducing the risk of important contracts being intercepted or leaked. The VDR cannot be entered without permission – it is sent only by the owner. Even the vendor who distributes the software solution and hosts the VDR on their server is denied access. These services are for trusted persons only.
Nowadays the physical Data Rooms have been replaced by digital ones. Confidential documents are now made accessible through web-based interfaces. After logging in, the interested party arrives in a folder structure that holds the necessary documents ready for download or screen view. Interested parties can easily find their way through the clear folder structure and navigate through the various data. All document pages are provided with watermarks, which show the exact time of viewing and the user ID.
There are the following requirements to the VDR structure:
- the use of client-server architecture with the possibility of using more industrial databases;
- organization of security through various methods of control and delimitation of access to information resources;
- support for distributed information processing;
- the modular principle of construction from software-independent functional blocks;
- the possibility of expansion through open standards.
Who will benefit from VDR?
Any business dealing with sensitive data can use VDR when secure transaction processing is required. This includes financial institutions that need to discuss confidential customer information without involving outside parties. VDR has traditionally been used for IPOs and real estate asset management. Tech companies can use them to exchange and view code or sensitive data needed to operate. The same is true for customers who only trust the most qualified people in the organization with their valuable code. The code is not something that can be printed and brought into a folder. It resides on the computer and must be shared.
The electronic data rooms are usually used during mergers and acquisitions, for complicated offers and transactions, for bankruptcy proceedings, conversions, and for negotiation of various contractual documentation. Accountants, lawyers, business managers, government agencies, banks, financial institutions, the buyer, and the seller can all contribute to virtual data rooms.