Virtual data rooms are advanced, cloud-based data management solutions used by many nonprofits, public institutions, clubs, businesses, and professionals from different industries. The demand for online data room software is growing rapidly, and it is already a billion-dollar market.
However, not all virtual data room providers are worth hiring. That’s because the quality and type of services vary from vendor to vendor.
What to consider when hiring data room services for your business? How to choose a suitable virtual data room provider for your business? Find out in the article.
What to consider when choosing a VDR provider
Here are the top five features to look for when you compare virtual data rooms to choose the right one.
1. Security
“Security for virtual data rooms is like oxygen for life; there is absolutely no concept of data room technology without digital protection. If you intend to use one, make sure it is safe as houses,” says Angleo Dean – CEO datarooms.org
Data security is the biggest selling point of VDR providers. However, the type of security you need depends on your usage. Data room security must be highly advanced in case you need it for external data sharing.
It is highly possible that all data room vendors may not be able to provide you with every security feature you need. Still, here are some highly important security features you must consider; these are commonly found in the best data rooms like iDeals, Caplinked, Datasite, etc.
- Two-step verification. As the name suggests, it is a two-step identity verification process that every data room user has to go through to access the VDR. It’s a basic feature but necessary to minimize threats of unauthorized entrants.
- Data access permissions. An electronic data room is different from other tools because it ensures a hundred percent control of data flow in the VDR. You must have the authority to decide who should or shouldn’t be given access to any folder, file, or even a page in the document.
- Screen-only viewing. The screen-only feature prevents virtual data room users from editing, copying, removing, downloading, or printing a document.
- Data encryption. Data encryption is a feature that allows sharing or storing data in a random/encrypted form, and only the intended recipient can decode that data. Ideally, look for 256-bit encryption.
- Fence-view. It should be a compulsory part of your data room if the data is expected to be shared with outsiders during strategic partnerships, M&As, or fundraising. It hides the desired data from any file and prevents screenshots.
2. Compliance
Compliance is another key feature to look for when choosing data room services. The United States and other countries require companies to follow certain practices for data handling and cyber protection.
Furthermore, different industries are regulated by autonomous bodies within a country. Here are some examples.
- Investment bankers, brokerage firms, or similar financial institutions operating in the US territories must comply with FISMA, FINRA, SSAE 16, and FedRAMP.
- Components of the healthcare industry, such as doctors, surgeons, hospitals, pharma companies, and public healthcare units, must comply with HIPAA.
- Companies in European Union often follow data management practices set by GDPR.
It is highly advised to choose a vendor that is certified by your governing authority.
3. Customer support
Although virtual data rooms are generally easy to install and even easier to use, they still need you to have some basic training. Additionally, your business teams and other employees in the organization have different capabilities related to using new technologies.
However, you can easily overcome these hurdles with the help of a vendor’s customer care unit. Customer support services not only assist you in setting up the data room, but they are super useful in training your employees and troubleshooting.
A customer care unit must be responsive, knowledgeable, and patient, and most importantly, they must treat every customer individually.
4. Ease of use
In addition to data protection, data room software intends to simplify multiple administrative processes in day-to-day activities or complexities attached to dealmaking. Here’s what to pay attention to:
- The data room you choose must be easily installable on your corporate operating system, such as Windows, Linux, etc.
- The vendor should allow mobile access through a dedicated application.
- It must have time-saving features like full-text search, drag-and-drop, bulk uploads, built-in file viewer and editor, etc.
5. Pricing
Virtual data room pricing is a slightly complex and important aspect. Apart from hidden charges and unclear pricing, data room vendors use different pricing techniques to charge for their services. These methods have their own perks and drawbacks.
Globally used pricing models include per-page pricing, per-user pricing, storage-based pricing, and flat monthly charges. The last option is the most commonly used method, and it is suitable for long-term or large-scale usage.
Final words
Selecting the right virtual data room provider can be a challenging phase for many, especially first-time users. Some of the most critical factors that you must consider when hiring data room services include data room security, compliance, pricing, ease of use, and customer support service.
For an informed decision, users can leverage data room comparison sites like G2, SoftwareAdvide, and Capterra.
