When it comes to choosing a virtual data room (VDR) for your business or company, it is crucial that you assess your company’s needs, regulations, compliances, and budget before making one of the most important decisions as a business-owner.
There is a large market of VDR service providers offering virtual data room software around the globe today. The most important task of any service provider is to be able to guarantee your company’s safety and confidentiality of data in their online storage and management data rooms. This is because most virtual data rooms are not used solely as a repository anymore but as a collaboration environment where coworkers can work in tandem and deals/transactions can be made.
Choosing the right VDR for your company means you need to think about: what type of business you are (financial, legal, technology, etc…), what specific VDR features you are looking for, how much you are willing to spend, what regulations you must adhere to, compliance, and other aspects related to your industry
The reputation of a virtual data room is very important when considering whether it will not only meet your business needs, but whether it is a reliable VDR that will keep clients’ private/sensitive information safe, will function as advertised for data management and sharing, and how well this software has been received by security experts in the tech field as well as customers.
Internet ratings are both easily available and handy in assessing the reputation of a VDR. These ratings are given by real users of the software, but always take the reviews with a grain of salt. Ratings of tech experts should be taken into account only if those experts are third-party and not biased based on financial compensation or competition between providers.
When you keep and share confidential information in a virtual space, security is key. The reputation of a VDR’s security is important when creating a shortlist of potential software providers. Based on your industry type, you may be able to shorten the list of potential VDR softwares based on which ones provide the right security needs, such as:
- 256-Bit SSL Encryption (or other SSL protocols)
- HIPPA Compliance (for administrative confidentiality)
- SOC 2 Compliance (for handling financial information)
- SAS70 Type II Compliance
- Legal Compliances
- 21 CFR Part 11 Validation (for drug trials)
- Two-Factor Authentication Options
- Virus Scanning
- Physical Security at On-Site Hosting Locations
…and many other types of compliance, certifications, and regulations. A high quality VDR concentrates on both file safety and access safety. The platform should offer the most important certificates (such as SSAE 16 and ISO 27001), firewalls, virus scanning, provide encryption of the data, Two-Factor Authentication, dynamic watermarks, and so forth.
In addition, the VDR owner/user (you) should also be provided with all of the rights to control access to the data room and to your folders and files.
When it comes to choosing a VDR, understanding what your business/company needs and what functions the virtual data room can provide you with are important. You don’t want more function than you can use (even if they are new and shiny — if you don’t use them, you are just wasting money) but you also want a VDR that does have all of the features you are looking for.
We have already talked about security, so let’s delve into some of the other features a VDR should include regardless of your specific industry needs. An intuitive dash and interface that makes navigation and tools easier to use is important. Mass-uploading capabilities, full text search tools, secure file sharing, mobile access, and other features that make data management or collaboration easier are important to ensure that you have a proper VDR.
There are a nearly endless range of features and functions that virtual data rooms can offer you, depending on your industry type, the size of your business/company, your budget, and needs. The list provided here is simply a small percentage of features that are often found in data room plans.
Price of a VDR can mean more than the price of a monthly or annual SaaS plan (software as a service). Virtual data rooms are, as the name suggests, able to be accessed and used via the Cloud/web. However, many VDR’s offer additional on-premise software or mobile applications to use for smartphone or tablet access.
Take into consideration that if you choose an on-premise software, the cost of ownership (COO) will be higher. There may be hardware to install that you must pay for, there may be a high installation fee, you may have to pay every time there is an upgrade, and the overall plan will likely be higher.
A completely cloud-based/web-based VDR solution is much less costly and is plenty secure for most industries — even a variety of highly-secure industries such as police departments, Fortune 100 financial firms, and criminal law firms have used cloud-based systems rather than on-premise ones.
However, if your business/company needs optimal security, an on-premise data room may be the best choice.
However, most of you reading this have SMB (small and medium businesses) or large enterprises that need medium to high security measures but not FBI-grade security needs. When considering the price, make sure your potential client list is realistic — don’t overestimate (remember, nearly every plan allows you to upgrade at any time) your client list. This could cause you to pay more for items you are not even using. It is better to underestimate your needs and upgrade if need be, than to overestimate your needs and be stuck in a contract without being able to downgrade.
As I nodded to in a previous section, don’t be swept away by novelty features or an excessive range of options. Some software providers put up a price tag and shove in as many features as possible. The bad news is, you won’t use most of them. This just leaves you with the big price tag and a bloated VDR.
Trendy features are useless unless you actually need them. So, keep your list of features you need on a handy list and simply get what you need. No more and no less.
Demos and Free Trials
After reviewing dozens of VDR’s, I have noticed that the most trustworthy and recommended virtual data room providers offer free trials. Ranging from 7 days to 30 days, the typical trial period lasts around 14 days. Take advantage of this! The trials allow you to choose your plan and put it into real use before buying it. This is enough to see first-hand which features you are using, which ones you are not, and what type of capacity you need.
Demos are even easier to access. If you want to check out all of your options and don’t want to download 10 free trials or do not have the time — then you’re in luck. Just about every single software provider offers demos and videos of their product. Simply request a demo and you can learn more about the product, what it is like to operate, and it’s features much more intuitively than looking at their website information and lists of functions.
Keep these guidelines in mind when seeking out a new virtual data room. Remember that you have a host of resources at hand including online reviews (like dataroom.org), free trials, demos, and customer support options to get your questions and concerns answered before you commit.