Get Instant Access
to This Blueprint

Data Business Intelligence icon

Virtual Data Room Guide

The latest technology you haven’t heard of but have used many times before.

  • Organizations are collecting and exchanging data at an astronomical rate today. New tools are opening up previously untapped channels for collaboration.
  • The sensitive nature of the information used in deal making, along with heightened regulatory scrutiny and reporting requirements and all the other moving elements, makes conducting transactions a huge task.
  • The difficulty lies in completing the transaction process of working with outside parties while using the best resources at hand.

Our Advice

Critical Insight

  • A virtual data room (VDR) is an online repository designed for secure collaboration on sensitive documents with outside parties. It is the physical data room's digital evolution.
  • VDR pricing is like internet and cell phone plans: there is a base fee and add-on fees for extra features. Avoid overages by selecting the best-fit pricing option.
  • Purchasing a VDR is not needed in all scenarios. If you are working with a third party (e.g. a bank) to help facilitate your transactions, then they might already have a VDR; therefore, the decision is made for you.

Impact and Result

  • The fundamentals: learn what a virtual data room is, how it works, and the advantages it offers.
  • Understand how a virtual data room differs from other file sharing options.
  • Consider pricing factors while deciding whether to purchase a virtual data room solution.

Virtual Data Room Guide Research & Tools

1. Virtual Data Room Guide Deck – A guide that walks you through the fundamentals of a virtual data room.

The purpose of this guide is to define everything you need to know when approaching a VDR solution.

This guide will explain the purpose, uses, and what to look out for when acquiring a virtual data room solution. It will also go through a brief provider comparison to help inform potential consumers.


Virtual Data Room (VDR) Guide

The latest technology you haven’t heard of but have used many times before.

Executive Summary

Your Challenge
  • Today, organizations are gathering and sharing data at an explosive rate. New tools are enabling unforeseen channels of collaborating.
  • The sensitivity of the data involved in deal making combined with increased regulatory oversight and reporting obligations makes conducting transactions a massive undertaking, along with all the other moving parts.
  • The challenge is to go through the transaction process of collaborating with external parties by leveraging the most appropriate resources available.
Common Obstacles

When going through a transaction there are some common obstacles:

  • Security. Are tasks being done without needing to worry about the data or the users being secured?
  • Efficiency. Do you have to go through extra steps as a precaution due to the sensitivity of the data involved?
  • Technology Problem. The current file sharing solution, especially if it involves physical paper, being leveraged is not meeting the needs of use cases involving external eyes on sensitive data. This is mostly due to missing features.
Info-Tech’s Approach
  • Start with the basics: Understand what a virtual data room (VDR) is, how it is leveraged, and the features that come with it.
  • Know the difference between a virtual data room and other file sharing solutions.
  • Decide your approach on whether to acquire a virtual data room solution and take into account pricing considerations.
Info-Tech Insight

A virtual data room is an online repository designed for secure collaboration on sensitive documents with outside parties. It is the physical data room's digital evolution.

Insight Summary

What is a virtual data room (VDR)? A VDR is an online repository designed for secure collaboration on sensitive documents with outside parties. It is the physical data room's digital evolution.
Determine the optimal plan when buying a VDR solution Pricing depends on features offered, project size, project duration, the amount of storage needed, the number of users, and the level of customization required. Like the internet and a cell phone, there is a base fee and add-on fees for extra features. Avoid overages by selecting the best-fit pricing option.
Purchasing a VDR is not needed in all scenarios If you are working with a third party (e.g. a bank) to help facilitate your transactions, then they might already have a VDR; therefore, the decision is made for you: a VDR purchase is not needed.

Virtual Data Rooms

versus

Generic File Sharing Solutions

A diagram of concentric semi-circles. The inner-most circle is 'Document Security', then 'User Security', 'Virtual Data Room Security', and 'Overall Compliance Security, Regulation - Audit - Compliance'. Above the circles is 'Information lifecycle' with four steps 'Generate', 'Capture', 'Deliver & Use', and 'Manage & Retire'; the middle two are circled as 'VDR focus'.

Virtual Data Room
On-a-Page

Store, share, and control sensitive corporate information and meet online securely. A VDR is:

  • A secure online repository that allows users to control who can access certain information in the repository, e.g. important financial transactions, fundraising, IPOs, and real estate asset lifecycle management.
  • Applied more and more to any organization concerned with secure and specialized management of its documentation.
  • A secure online meeting place for all parties involved in the negotiation of an agreement.
  • Accessible from anywhere.
  • Used for M&A or joint venture investments, executive communication between board members, patents and licensing, loan syndication, and private equity and venture capital funding.
  • Different from standard cloud storage in its complex rights management outside the company firewall and how it leads users through the entire deal and due diligence process.

Most popular uses:

  • Structured arrangement and organization of all necessary documents, including texts or images.
  • High-speed digital sharing of documents, which takes seconds instead of traditional mailing or courier delivery, which takes hours or even days.
  • Secure, granular access to the documents and files from any device, whether desktop computer or a tablet.
  • Quick, safe, and efficient discussion of documents online instead of time-consuming and risky face-to-face meetings.

Pricing:

  • Pricing depends on features offered, project size, project duration, the amount of storage needed, the number of users, and the level of customization required. Like the internet and a cell phone, there is a base fee and add-on fees for extra features.
  • There are four pricing models:
    • Per Page: Charged by page storage. Suitable for small projects. Can range from $0.40 to $1.00 a page.
    • Per User: Charged by the number of user licenses. Vendors offer a fixed number for a flat rate. User administration licenses range from $100 to $300. Other users/guest rates are lower.
    • Storage: Charged by the amount of storage required. Overages can add up.
    • Flat Rate: Monthly custom packages are available that support varying amounts of data, pages, and users. Flat rate pricing will eliminate overage surprises and allow for consistent budgeting. An average range would go from $500 to $1,000 a month.
  • Pricing can range from a few hundred dollars a month to over $100,000 for a large project.

Virtual Data Room
Features

Top features:

  • Access security
  • Easy and secure upload, saving and management of multiple files
  • Customer support
  • Ease of setup
  • Reporting

Other features:

  • Activity tracking and audit log
  • Multiple file format support
  • Bulk upload
  • Anti-virus protection
  • Simple and easy-to-use workflows
  • Unlimited users and storage
  • Optional pay models, upgrade when needed
  • Q&A tool
  • Notes
  • Alerts and notifications
  • Dynamic watermarks
  • Machine learning (enables automatic document translation and automatic red flag analysis)
  • Accessible from anywhere there is an internet connection
  • Multi-language support
  • Advanced search
  • Mobility
  • Multiple projects in one account
  • Microsoft Office integration
  • Print screen disabling
  • Customization
  • Collaboration

What to look out for when selecting a VDR

Certifications and audits

  • Virtual data room provider should be audited regularly and guarantee the maximum security in line with the highest security standards according to the ISO 27001:2013 certification and the GDPR.
  • Ask yourself: Do you only require secure data storage or all the functionality of a VDR?
  • Providers offer different levels of customer support – some around the clock, while others have more limited contact.
  • You don’t need to spend as much money on one-off projects as you do with ongoing or more business-sensitive projects. Do your projects require file sharing without enhanced security features?
  • Review the providers’ certificates. Use an accredited provider when dealing with sensitive information.

Fit for your key use cases

  • M&A and due diligence, legal documents management, capital raising, real estate transactions, regulatory risk management use case: M&A involves large volumes of confidential documents that need to be stored and protected with several security. Bidders in the M&A deal have access to information stored in the data room 24/7 with no limits as long as the seller’s side grants this access. The seller has transparency on user activity, documents, or buyer request analytics.
  • Fundraising use case: Fundraising campaigns can last for weeks, even years, and engage many teams and professionals to review, comment, or update financial documents. VDR should let users share information quickly and safely. Also a Q&A section and a comments section allow all parties of the fundraising process to communicate and stay on the same page. To improve the cooperation process, the fundraising virtual data rooms offer features like direct messaging, task manager, and other additional functions that facilitate teamwork.

Balance security and usability

  • A variety of document protection options: Can make the documents very secure – no printing, no screenshots, no downloading, and a large digital watermark, but the parties reviewing the documents may not be very happy with the user experience and the inconvenience, or the sensitivity of the document may not warrant the restrictive measures you’ve put in place.
  • You can make the documents easy to download and share, but at the end of the transaction, you might lose track of those documents, running the risk that local copies are out there outside your view. As an administrator, carefully weigh security and usability to find the right balance.

Who should provide the VDR?

“Those who don't use a VDR may be seen as not professional and that can impact your deal-making advantage.”

Situation 1
The seller should provide the virtual data room of their own data.

Situation 2
If the buyer has a VDR, then they might mandate using theirs since they will own the data,

Situation 3
If there’s a third party (e.g. a bank) to help facilitate the transaction, then you might not even need to purchase a VDR.

VDR Value Determination Matrix

Achieve value by determining the optimal plan option.
VDR Value Determination Matrix. Rows are 'Usage': 'Low', 'Medium', 'High'; columns are 'Plan Options': 'Projects', 'Users', 'Page', 'Storage', 'Archive', 'Support'. Fields are color-coded to the legend on the right. Base Fee Determined Based on Plan Details. Numbers are based on what providers typically charge.

Customize the color of matrix to your organization’s usage.

The column with a single most likely circumstance is the option with the best chance of avoiding extra charges.

For example, the best options for consideration in this instance are by page and storage as they are the only options with the highest overall likelihood.

Legend for the adjacent matrix. Dark blue fields are 'Likely Usage', Green fields are 'Possible Usage', and Grey fields are 'Unlikely Usage'.

Info-Tech Insight

If you are working with a third party (e.g. a bank) to help facilitate your transactions, then they might already have a VDR; therefore, the decision is made for you: VDR purchase is not needed.

Success Metrics

Metrics that will prove if your virtual data room was successful.

Adoption: How much engagement does your data room yield?

Efficiency: How efficient is it to conduct tasks in your data room?

Versatility: How flexible and accessible is your data room?

Security: How vulnerable is your data room and its assets?

Adoption Current Goal
Number of documents/pages accessed 50 75
Number of documents/pages with feedback 50 75
Amount of time spent in the data room per invited user 50 75
Efficiency Current Goal
Average time period to complete transactions 50 25
Number of tasks automated 50 75
Amount of time spent uploading/sharing/archiving 50 75
Versatility Current Goal
Number of different tools/technologies used throughout transaction process 50 75
Number of documents duplicated 50 25
Satisfaction that solutions delivered are cost-effective 50 75
Security Current Goal
Frequency of unexpected vulnerabilities 50 25
Number of vulnerabilities remediated 50 75
Average vulnerability remediation time 50 75

Provider comparison

Core features, Price models, Comments

What to look for when selecting a file sharing solution

Current landscape

  • Do you already rely on Microsoft services? Do you already have OneDrive?
  • Where are the files stored? Is there compatibility and integration? What are key information flows?
  • Windows only or Mac OS?
  • Are you already a frequent user of Adobe or DocuSign?
  • Is there a document management system and practice (this is the best defense)?
  • What are your security practice levels (physical security, logical security, policies/behavior)?
  • Include representation from users and stakeholders.

Requirements

  • What is the volume of users, documents (i.e. not reasonable to apply passwords to hundreds of individual documents)?
  • Is multi-lingual required?
  • Compliance considerations: e.g. where are the servers? Is there a GDPR requirement?
  • Can it be audited?
  • What are the in-house resources and maturity level, i.e. preferable to customize and build or have out-of-the-box capabilities?
  • What are the document types, e.g. PDFs, Word documents, digital assets such as video?
  • Will a VDR require a change in user behaviors and culture (training, support, policies)?
  • What admin and audit controls do you need?
  • What is the workflow?

Business context

  • What are the key information flows and business activities, the ones that impact customer service, compliance, etc.?
  • What are your challenges?

Provider categories

Use case Provider categories Provider examples
Ad hoc file sharing File Sharing OneDrive
Files.com
DocuSign Room
Adobe File & Transfer
Bulk, automated file sharing
(‘A very secure Dropbox’)
Managed File Transfer GoAnywhere MFT
Egnyte
Console to audit and control secure external collaboration
(Most secure way to share files)
Virtual Data Room iDeals
Datasite
Firmex
Bulk email, newsletters, marketing Email Marketing GetResponse
Campaign Monitor
Marketing Automation HubSpot Marketing Hub
Adobe Marketo Engage
Manage contracts workflow throughout the lifecycle Contract Lifecycle Management SAP Ariba
PandaDoc Contracts
Insurance software
(All-in-one solution geared for your industry)
Insurance Management SAP Core Insurance Management
Blue underline = Link to Info-Tech’s SoftwareReviews provider scorecards

VDR provider comparison

Provider

Feature
User experience Multi-layered security Audit & tracking Access control Support 24/7/365 Document management Collaboration Cost plans
iDeals Three types of subscription
Rated highly for value for money.
Datasite Two models: Single use platform or multi-use
Transparent pricing policy
Cost at higher end of market
Intralinks VIA Prices for fully packed room start at $200 per month.
Higher prices reflect large complex projects and enterprise size it’s designed for
Three versions, fundamental with additional modules
Rated fair to good value for money
Ansarada Data Room Starts at $39 per feature per month
No free version; Free trial
Unlimited users on all plans
Rated fair to good value for money
Box Starter: $5 per user per month; Business: $15 per user per month; Business Plus: $25 per user per month; Enterprise
Two week free trial; Free version
Firmex Data Room Rated good value for money.
Free trial; No free version
Rated good to high value for money
Citrix ShareFile Depending on project needs, customers can get core services and add modules as needed
Flat rate cost; Free trial; Starts $375 per feature per month; Rated good to high value for money.

VDR comments

Provider Comments
iDeals Agile service, satisfies any needs of different sized companies, industries. Regular scanning for viruses. Time stamps indicate when files saved or printed. No plug-ins required, room can be entered via all browsers and devices.
Interface can be customized and prepared in multiple languages. Multi-lingual customer support.
All user activity tracked and time-stamped. 256 bit encryption, automatic watermarking, antivirus protection. Full mobile compatibility.
Downloading encrypted files requires installation.
Datasite Large enterprises and smaller start-ups. Simple interface. OCR allows search within PDF documents.
Files can be uploaded via email, and no need to enter the room every time when new data has to be added. Admin “view as” feature helps to check that each visitor has right access. No plug-ins required. Platform compatible with wide range of file formats, minimizes need for users to convert files. Expiry period limits file access even after it’s downloaded.
Cannot be accessed from a mobile device. Not as many advanced features as other providers.
Multiple languages. Analytics. OCR.
Integrated Q&A.
No free trial.
Intralinks VIA Handles large volumes of information. Watermarks indicate time and user who downloaded or printed file. Several steps to pass identity check. Admins get notified when alterations or actions take place in room. Any unexpected actions can be stopped immediately. Specialized access rights by individual or group. Company also provides Contract Management Software – can combine VDR to build complete seamless solution. Simple environment for both occasional or new users and more experienced users.
Key product, VIA, supports strategic collaboration for range of industries. Mobile users have same functionality for aspects of the deal, including file upload and user management. Integration with Microsoft Office. Consulting services, optional training and round-the-clock support. Tend to work with larger enterprises.
Meant to handle large projects. Not very customizable, e.g. cannot upload your logo. No free demo.
Ansarada Data Room Targeted to M&A sector. Follows activity of diverse visitors. In-depth reports of activity. Multi-lingual services. Automatic translation services.
Best for one-time deals, not long-lasting collaboration. AI and machine learning to highlight risks and opportunities.
No free version. Free trial. No Q&A feature for users.

VDR comments, cont'd.

Provider Comments
Box Simple user experience. Best for small to midsize companies. Dashboard. Good for non-profits. Task management. Mobile.
Upload files in bulk. Integrates with Microsoft Office. Can use for several deals at once. Can divide room into functional permission groups. Admin can revoke access to file even after it’s been downloaded. Company offers other services so VDR is not its sole focus for innovation roadmap.
Full customization with logos. E-signature and task automation.
Firmex Data Room Easy to upload documents to data room and organize them in convenient folder system. Optimized to operate smoothly on all platforms and devices.
Flawless security protections, so favored by biotech and pharmacy researchers. Compliant with international security certificates. Easy experience for new users.
Apply watermarks, restrict viewing, saving, and printing. Auto-indexing, using OCR to search files.
Citrix ShareFile Cloud-based data room appropriate for deals executed by various professionals such as financial advisors, brokers, government contractors, biotech, real estate firms, and private equity firms. Instant email alerts and notifications for views, downloads, or alterations.
Complete transaction archiving after deal completed. User can receive complete backup of VDR. May require some additional plug-ins.
Simple interface and basic set of features for those who need to store and share files.
Offers add-on that connects Outlook email to VDR.

Research Contributors and Experts

Info-Tech Research Group

Ibrahim Abdel-Kader, Andy Neill, Chris Dyck, Andrea Malick, Irina Sedenko, Igor Ikonnikov, Milena Litoiu, Imad Jawadi, Matt Bourne, Sharon Foltz

DealRoom
John Morada
Domo
Ben Schien, James Johnson

Firmex
Kaynan Kaplan

Anonymous
Avast, Capgemini, DocuSales, Interac, Siemens, Walmart

“Best Virtual Data Rooms: Comparison Strategies and Provider Overviews.” VDR Software, n.d. Accessed August 2022.

Creed, Maria. “Virtual Data Rooms vs. File Sharing Services” Clinked, n.d. Accessed July 2022.

Dobson, Steve. “The History of Virtual Data Rooms” Sterling, 16 April 2020. Accessed July 2022.

“Introducing Redaction: the simple way to protect sensitive data.” iDeals, 17 August 2017. Accessed July 2022.

Kenton, Will. “Virtual Data Room (VDR).” Investopedia, 23 June 2021. Accessed July 2022.

“Layered Protection: Security That Keeps Your Documents Safe” Firmex, n.d. Accessed July 2022.

Spence, Jacq. “Virtual Meeting Rooms: How to Set Up and Host a Virtual Meeting.” Lifesize, 26 Feb. 2020. Accessed July 2022.

Tinker, Justin. “The evolution of virtual data rooms in M&A.” Financer Worldwide, Sep. 2014. Accessed July 2022.

“Virtual Data Room Pricing: What You Need to Know” Firmex, 4 March 2018. Accessed July 2022.

“Virtual Data Rooms: Everything You Need to Know.” SecureDocs, n.d. Accessed July 2022.

“Virtual Data Rooms vs. File Sharing Services” DealRoom, n.d. Accessed July 2022.

About Info-Tech

Info-Tech Research Group is the world’s fastest-growing information technology research and advisory company, proudly serving over 30,000 IT professionals.

We produce unbiased and highly relevant research to help CIOs and IT leaders make strategic, timely, and well-informed decisions. We partner closely with IT teams to provide everything they need, from actionable tools to analyst guidance, ensuring they deliver measurable results for their organizations.

What Is a Blueprint?

A blueprint is designed to be a roadmap, containing a methodology and the tools and templates you need to solve your IT problems.

Each blueprint can be accompanied by a Guided Implementation that provides you access to our world-class analysts to help you get through the project.

Talk to an Analyst

Our analyst calls are focused on helping our members use the research we produce, and our experts will guide you to successful project completion.

Book an Analyst Call on This Topic

You can start as early as tomorrow morning. Our analysts will explain the process during your first call.

Get Advice From a Subject Matter Expert

Each call will focus on explaining the material and helping you to plan your project, interpret and analyze the results of each project step, and set the direction for your next project step.

Unlock Sample Research

Authors

Ibrahim Abdel-Kader

Andrea Malick

Contributors

  • DealRoom: John Morada
  • Domo: Ben Schien, James Johnson
  • Firmex: Kaynan Kaplan
  • Anonymous: Avast, Capgemini, DocuSales, Interac, Siemens, Walmart
Visit our IT Cost Optimization Center
Over 100 analysts waiting to take your call right now: 1-519-432-3550 x2019