A virtual data room is a service designed to securely store, edit, share, and discuss information. The most advanced data rooms are compatible with any file format and let you edit files in the most popular formats (Word, Excel, PowerPoint, etc.).
At their core, virtual data rooms are the descendants of physical spaces where various documents related to a business or intended for a specific deal were stored. Before the rise of technology, to close a deal or work with sensitive documents, those people who participated in the transaction were granted limited access to the room.
Unlike their predecessors, virtual data rooms give their users flexibility and accessibility: users can work with documents 24/7/365 regardless of their location or the type of software they use. Restrictions can be defined and set only by the admin of the data room. The admin decides which documents and data are available for the use, as well as what the user can do with these documents and whether users have the right to download these documents.
A modern data room is an online directory with files, accessible by login and password. After accessing the directory, users can view, edit, and comment on the files or upload these files. The most popular data rooms also have additional options: a F.A.Q. section, work chat, integration with a calendar, and project management tools.
Online data rooms vs. physical data rooms
A virtual or physical data room is a repository for large volumes of data related to intellectual property, the fundraising process, mergers and acquisitions, litigation, etc. Undoubtedly, all this highly confidential information must be under high-class protection to not endanger the company’s life or the deal.
However, because physical data rooms could not provide sufficient safety even with physically secured data centers, an improved alternative emerged for companies — online data rooms.
Physical data rooms require expenses for rent, proper security, maintenance, etc., which also need staff employment. In addition, the parties to the transaction had to get to the storage, and it was often necessary to organize business trips.
On the other hand, virtual data rooms are an online solution available anywhere, saving time and money. Moreover, thanks to dedicated tools, the online data room provides complete data control, secure file sharing, user activity tracking, easy document search, and smooth collaboration.
Peculiarities of data rooms and deals in Australia
2021 has been a year of increased legal transactions, including due diligence and M&A in Australia and worldwide. This rise is due to a large amount of cash in the market, low-interest rates, and pent-up demand due to Covid-19.
So, according to one of the leading Australian law firms Clayton Utz, in 2021, Australian companies entered into a record number of deals in real estate, healthcare, agribusiness, energy and resources, transport and infrastructure.
In 2022, the epidemic is on the decline, but it continues to impact businesses in all industries. As a result, directors are looking for solutions to continue operating at a sustainable growth rate and make the entire deal process less time-consuming. After all, these high-tech tools allow them to make deals and develop despite the restrictions.
The optimal software to have such deals and related due diligence processes in Australia is virtual data room software. The popularity of this software is explained by the benefits that virtual data rooms offer:
Enterprise-level of security for a secure virtual data room
Confidential data protection with a limited viewing mode, remote shred following downloading of the data, watermarks, etc.
Speed and availability from any location and device
A VDR’s transfer speed and the design of infrastructure ensures that files are uploaded safely, while the downtime of collaboration is low. For example, an Australian data room should not be dependent on a German data center.
Flexible document and file management
Dragging and dropping of selected files or uploading files of any format in bulk, automated index numbering and full text search for simple navigation allow users to upload, delete, merge, move, view, download, restore, and rename files and folders easily.
Ease of use
Online rooms to store data offer a single sign-on, multilingual access with mobile user interface and native apps (iOS, Android) to work with files from any device.
Granular access settings
Single or bulk invitations for users (separately or in groups) with detailed user permissions and customizable user notifications makes VDRs simple for use for companies of any size.
User activity and actions-with-files reports
Everything that users do in the data room is recorded for admins to easily generate a variety of reports and track all changes undergone by the data.
Distributed work with files
Modern online rooms combine a set of built-in collaborative tools: frequently asked question segments, real-time discussion, the tools to allocate questions across experts with question status added, educational tools, etc.
Appearance settings
Logo, company branding, header and footer, theme colors along with watermarks and automatic translation make VDR an easy-to-navigate workspace for any team member.
Compliance with international security policies
ISO 27001:2013, SOC2, Microsoft Secure Development Lifecycle, OWASP: these standards make VDR a reliable space to store important data.
Main tips on how to choose a data room provider
This site was created to help Australian businesses to choose among dozens of data room providers. Luckily, with the development of technologies, a large number of players that meet the needs of various companies have emerged in the market in the recent years.
To outrun their competition, some providers use the terminology and segmentation of their own features rather frivolously. In order to make your choice of provider easier and help you make an informed decision, we decompose all of their features rather meticulously and compare all of them separately. By doing this, we get the most objective assessment of each data room available in the market.
To choose the most relevant provider for your business of any size from any industry, we recommend that you pay close attention to the following parameters as any investment should not be made in vain:
The virtual data room providers should have experience in your industry or be suitable for the type of deals you intend to close.
Online data room providers should have a clear and concise Service Level agreement (SLA) on data security and data room uptime.
Data room features. You can use the above-mentioned list of features to assess the provider. Alternatively, you can check the comparison table of providers on our site.
The cost of using the VDR (regardless of its type be it cloud-based or an on-premise solution) and ROI of using an online data room should be clear for your business.
Virtual data rooms’ reviews are a significant part of the process of choosing the best virtual data room, especially when a review is written by a business from your or similar industry.
The quality of the provider’s support service should be very high. Among the indicators of the support service’s quality are the responsiveness and speed of reaction of customer care teams.
The difference between data room software and cloud storage
Among the important decisions you have to make when selecting online data room software is the choice between a boxed and cloud-based solution.
In general, the selection of features behind both approaches is similar: they store documents securely while providing flexible access control and collaboration tools, etc. However, there are differences as well.
First difference: maintenance cost
With a software (server) solution, you will need to pay for the server, hire a support team and programmers to maintain it. With a cloud (software-as-a-service or SaaS) solution, there won’t be such a need.
Second difference: the drawbacks of human factor
A software solution works the same way as a SaaS solution in terms of user access, control of users’ rights to view, edit, copy or download documents in an electronic data room; it provides the same collaboration tools as SaaS.
Yet, the boxed solution has one significant drawback: the influence of the human factor. Most hacker attacks that occur in the corporate environment today are performed not by using programmers’ skills, but employing social engineering.
Therefore, if someone gains physical access to your server (s) storing sensitive data, these people will have full access to downloading any information, bypassing even the most advanced digital security protocols.
Common cases of using data rooms
VDRs are mostly used by companies that need to work with a significant number of documents, control the level of access to each document, and ensure uninterrupted and secure collaboration.
That is why the main areas of the VDR use are:
Mergers and acquisitions (M&A) and due diligence: for incorporation documents; corporate bylaws; stock option agreements and plans; recapitalization or restructuring documents; income, sales, and other tax returns filed in the last five years; tax sharing and transfer pricing agreements; patents; copyrights; trademarks; licenses and licensing agreements… In total there could be more than 50 documents.
Fundraising: for CVs of each founder and any key members; business description; pitch deck; information deck; business model deck; financial model (P&L, business plan, funding, exit strategy); marketing plan; warranties; due diligence documents; etc.
Initial public offering (IPO): for listing application form; approved prospectus; audited annual reports and financial statements; certificate of incorporation; memorandum and articles of association; due diligence documents; etc.
Real estate deals: for income details documents; mortgage discharge authority form; certificate of title; closing disclosure; additional documents for refinancing / first home buyers / investors / construction loan / home owners; etc.
Life science documents: for case report forms (CRFs); informed consent forms; patient diaries / recruitment materials / reported outcome measures / source documents; pharmacological studies and protocols; medical devices documents; regulatory affairs; etc.
Virtual Data Room Comparison
To choose a virtual data room and its provider, businesses need to understand the major principles of virtual data room comparison.There are two areas to focus on as part of this process: the data room features and reputation of data room providers.
The table below will help you structure all features properly. All data was collected from providers websites and interviews with direct providers’ customers and structured by in-house virtual data room experts.
To manage the second area — the reputation of a software provider — you can use the rating below as well: it includes data room reviews collected from independent solution listings.
Platform
windows
Yes
No
No
No
No
Yes
No
No
Yes
Yes
Mac
Yes
No
No
No
No
Yes
No
No
Yes
Yes
Saas
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
iPhone
Yes
Yes
No
No
Yes
Yes
No
No
Yes
Yes
Android
Yes
Yes
No
No
Yes
Yes
No
No
Yes
Yes
Support
24/7 live support
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Business Hours
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Online
Yes
No
Yes
Yes
No
No
Yes
Yes
Yes
Yes
Virtual Data Room Features
Drag & Drop Upload of Multiple Files and Folders
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Due diligence Management
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Procurement Management
Yes
No
No
Yes
Yes
Yes
No
No
Yes
No
Tracking of All User Activity
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Document Tagging
Yes
No
No
Yes
Yes
Yes
Yes
No
Yes
No
Secure Preview
Yes
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Role-Based Permissions
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Branded User Interface
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Benefits of using virtual data room software
Virtual data rooms have many advantages over physical data rooms and other online platforms. The most important benefits are.
Management and control
As we’ve mentioned before, the number of corporate transactions in the Australian market remains the same despite the lockdown. Businesses of different sizes use virtual data rooms to close deals or store sensitive documents because of their security, control, predictability and ease of use.
Virtual data rooms allow precise and flexible control of users’ access to separate documents or chosen sections of data rooms. Moreover, advanced remote functions allow business admins to delete sensitive data, even if it was downloaded to the users’ devices.
Forecasting and predictability
SaaS-based solutions are the most popular VDRs in the market. They allow businesses not only to reduce maintenance costs (businesses do not need to maintain their own infrastructure, hire full-time programmers or administrators) but to predict the expenses for months and years ahead.
Security and stability
Two-factor authentication, a log of actions with documents and user activities within the data room, and other security options and protocols ensure a secure data exchange and collaboration within the virtual data room.
All these options have made virtual data rooms widely used and praised as a handy tool to facilitate deals in Australia.
And this site — with all the virtual room ratings, real user reviews, and feature comparisons — is aimed to help you choose the perfect VDR for your company.
