A secure data room is a cloud-based solution specifically designed to store and sharing confidential business data with access control. A modern version of a physical space where hard copies of documents are viewed during sales or buying negotiations The modern day data rooms have encryption technology as well as advanced security features too.
Secure virtual datarooms are based following the same premise as personal storage and sharing platforms like Dropbox or Google Drive but with a significantly higher level of security protection. Information and documents are protected when they transfer to cloud, while being shared in a virtual data room and when they are stored on the server. This makes them more secure than other file sharing and storage tools that depend on plugins or passwords to restrict access to specific devices and locations.
In addition to accessibility basics (on any device and no matter where you are) Data rooms will typically include collaboration capabilities, e.g. Chat and team messaging can be used to enhance due diligence processes. They also have a full audit trail that reveals the activity of all users to ensure that any breaches can be identified and traced back to the source.
The majority of data rooms are created to support the due diligence process in the merger or acquisition that allows both parties to access the data and conduct a thorough analysis. However, they are becoming popular for other types of M&A activities, including restructuring, fundraising and divestitures. They can also be used as a way to review and share documents within teams with the benefit of a more secure encryption security compared to traditional email.