How a Virtual Data Room Differs From Any Traditional Cloud-based Storage: Which One to Choose?

These days, businesses have more options when it comes to storing and sharing data information. Two of the popular platforms being used are the virtual data room and the traditional cloud-based storage. How do they differ and which is better? Let’s scrutinize them and answer the question later.

Most people prefer the traditional way of storing data. But more and more people are discovering that virtual data rooms have more benefits, and it would be foolish not to make a switch. You need to understand the technology behind the virtual data room before you decide.

Let’s see how virtual data room differs from traditional cloud-based storage.


When it comes to efficiency, the VDR has the edge over its traditional counterpart. The transactions are fast, thus increases deal value and lower the costs. Also, a virtual data room can reach a huge number of bidders fast.

Unlike in traditional setup, you need to schedule an appointment to have a meeting. With VDR those bidders will have access to the room at the same time. As a result, the deal time is reduced, and the bid value is higher by 20 to 30%.

These bidders are busy individuals, and they do not have time to travel to the meeting place. Virtual data room has higher possibility to convert the bidders into buyers since they have access to data room anytime they want to.

Simple and Secured

Your work is simplified in a virtual data room. As compared to an actual data room which is not straight forward, the work is tedious and time-consuming. Most of the time the traditional data rooms are conducted at a lawyer’s office to make sure everything is secured. Although this process does increase security, your maintaining cost is also increased with the traditional system.

With the virtual data room, all your data are stored on a secured server. You can control to whom you will give access to the documents. Copying the documents are restricted as well; they can only copy it if you will allow them. This is something that is not allowed in the traditional data room.


In a virtual data room, monitoring is easy. This system is fast and simple. Most of the time, you can have your data room set up and run within a few hours, and thousands of documents can be stored and made available on your site within a few days.

In a regular data storage, monitoring and tracking who viewed the document are not possible, but on digital data room, it gives you daily reports of which among the bidders access the documents. Virtual data room provides you with information electronically as to who viewed the document and when they did access it.

Communicates Effectively

Virtual data room can keep the communication in order and confidential. The actual data rooms lack this privilege which is a big advantage of VDR. The communications between you and the bidders in online data rooms are kept confidential and detailed.

Questions intended to a particular company were answered directly without exposing the information to others. Adding new documents so the bidders can see is also easy, upload it to the system and you are done.

Provides Valuable Information

In a virtual data room, the company’s interest is easily analyzed, and this is not possible for traditional cloud storage since it does not have such reporting tools. This information is very useful; your investment banker can use this to increase value during the bidding process. Knowing the interest of the bidders is an important component to increase the bidders offer to your company.

Essential Factors to Consider in Choosing a Virtual Data Room

Investing in a virtual data room is not as simple as you think it is. You need to consider some factors that may substantially affect your business.


One factor you should consider is security. You need to understand the risk involved. Yes, they say it is secured but how secure it is. With today’s latest technology, even the government’s website is not safe.  Reliable providers of online data room are using a system that will ensure users hackers will not be able to penetrate.


Providers of VDR are charging their clients depending on the amount of storage used as well as the length of time that the data room is running. Some law companies with advanced M&A provide their own proprietary data rooms. Some providers may charge a subscription for continuous access. Choose a provider that will charge per use if you only need the VDR for a one-time deal. But, if you will need it for multiple projects all year round, choose the one that offers a flat fee, subscription-style.

Use and Functionality

It is essential that your online data room is user-friendly so everyone can access it with ease- anytime and wherever they are. This will save you from hours of training them. Choose the one that is easy to set up and uploading files in bulk should not be a problem.

Remember, one of your purpose of using VDR is because of its ability to keep a great number of documents and managed it accordingly. Having a system that lets you upload the bulk of zip files or can drag and drop files easily can save you a lot of time, and keep your deal moving.


This is also an essential factor that you need to keep in mind. Bidders might be accessing or viewing that VDR using their mobile devices, tablets, and other operating systems. Make sure that your virtual data rooms are accessible using these platforms so your clients will not have any issue using it.

Final Thoughts

There are lots of reasons why professionals are favoring virtual data room over traditional cloud storage. It is the best option for storing and sharing confidential information during transactions and negotiations. If the stake involves a significant amount of money, never trust your most sensitive document to any platform as you never know who is just waiting for the chance to get access into your most confidential information.

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