What Is a Secure Data Room?

A secure data room is a solution in the cloud specifically designed to store and sharing confidential business information with restricted access. Virtual data rooms are the contemporary version of physical rooms, where hard copies were scrutinized in the course of negotiations between buyers and sellers. They also have advanced security features such as encryption technology, encryption and other advanced features.

Secure virtual data rooms are typically built on the same principles as personal storage and sharing services such as Dropbox or Google Drive, but with significantly more security. Documents and information are encrypted as they transfer to the cloud, as they are shared in a virtual data space and while they’re stored in the server. This makes them safer than other file sharing and storage tools, which rely on passwords or plugins to limit access to certain devices and locations.

In addition to basic accessibility (on any device and wherever you are), a data room will typically include collaboration capabilities, e.g. chat and team messaging, to enhance the effectiveness of due diligence processes. They usually provide an audit trail of every activity performed by users so that any breach great site can be tracked and traced back to the source.

Most data rooms are designed to aid in the due diligence process of an acquisition or merger as both parties are able to access the data and perform a thorough review. They are also becoming popular for other types of M&A activities, such as restructuring, fundraising and divestitures. Some are used to share and discuss documents in teams with the added benefit that they offer a more robust encryption security protection than email.