VIRTUAL DATA ROOM VS PHYSICAL DATA ROOMS
What are virtual data rooms and physical data rooms
Virtual data room (VDR) are commonly used by businesses and it is simply a secure online repository of information that is used for document storage and distribution. It is typically used to facilitate the due diligence process preceding a merger and acquisition transaction, loan syndication or private equity, venture capital and much more.
Physical data rooms are physical locations that are used to store important documents that are required during an merger and acquisition transaction.
Virtual data rooms as compared to physical data rooms
A virtual data room has emerged as the most secure and dependable course of action to share, store and manage sensitive data online. Virtual data rooms have become exceedingly popular and are used by a number of industries. One of the major reasons for virtual data rooms being popular and actively used by several industries is its unbreachable data security. Data breach is one of the biggest threats that companies face in today’s time. With the use of virtual data room, investment of time and resources are reduced and the company can have well managed, systematic and expedite process of due diligence, merger and acquisition and a lot more.
A virtual data room remarkably saves times and is cost effective as compared to physical data rooms because you don’t need any physical space and all the information, documents and data can be accessed from anywhere at any time. The only thing a company needs to take care of is a secure computer system while running virtual data room whereas for a physical data room you need a physical space for storage of documents which is very expensive, also physical presence of security is required 24/7/365 which is very inconvenient and expensive as compared to virtual data rooms. Virtual data rooms ensure utmost security of the documents and data in much more convenient, timely and cheaper way as compared to physical data rooms. Any authorized person can view the documents and data at any time across the globe, physical presence is not required as access to the documents and data can be shared virtually via internet and the access can also be revoked when no longer required. Misfiling, theft, natural disasters like storms, fire, flooding are all major disadvantages of a physical data rooms. More over Virtual data rooms also brings transparency, improvement in diligence and smooth acceleration of business processes with utmost security.
Hence Virtual data rooms are more preferred by modern businesses in today’s highly competitive business.
