What is a VDR | A Guide to Virtual Data Rooms

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One of the greatest challenges of the corporate world has been ease of access to data and how to secure it. However, with the creation of virtual data storage rooms, it is now possible to securely store your files in a digital-backed cloud.


Cybersecurity, or internet security, has been growing rapidly for the past few decades, and this is because of the growing number of fraudulent activities that are prevalent on the internet.


Many of the internet fraud examples that have happened over the years are possible because the brains behind the fraudulent activities had access to specific data and files, which they took advantage of. Cyber fraudsters use different methods like sending viruses, malware, and so on, to access their target's data, and then they can garner necessary information to perpetuate their fraudulent activities.


Thanks to innovative technologies like cloud storage or virtual data rooms, Google and other internet moguls brought a more secure, accessible, and innovative way of keeping data, backing up data, and sharing data. All without fear of a third party accessing your data behind your back.


Google Drive Storage, for example, allows you to store data ranging from music, documents, to other file formats up to 15GB All For FREE. Moreover, it allows you to customize access to your files using the "file sharing" option, but these functions are still less preferable when it comes to corporate transactions. To use Googles one drive storage all you have to do is sign up for a Gmail account.


File storage, security, and sharing just got easier and better with technology


Technology is playing a big role in boardroom activities by helping to accelerate the progress of M&A deals, satisfy compliance imperatives, and facilitate risk oversight.


The new technological wave in this regard is the VDR or Virtual Data Room. Many corporations and global entities now rely on virtual data rooms, because it helps to create a balance between timely access to data and the security of it.

What is a Virtual Data Room?

VDR is the abbreviation used. Clearly, a virtual data room is the opposite of a physical data room which has been used for many years and is still being used by some organizations. A virtual data room enhances the way corporate organizations share information. It utilizes similar technology as general cloud back up, but offers some key advantages. VDR’s are the next level of cloud storage.Your information is stored online and is accessible from online.

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vdr security


Virtual Date Rooms VS Cloud Storage


By using them you will not see a difference. They are designed to be secure and protect business assets. How important is data security to you? If your using cloud storage for personal use then the importance of internet security and risk of losing your files may not be as much of a concern as using it for business.


Security, Security, Security and all the features of security that come with it, this is the difference of a VDR vs basic cloud storage.

Why Virtual Data Rooms? Are they Secure and Easily Accessible?

  • This 'digital space'-backed cloud storage system is a safer and more secure way to store files and data.


  • It also aids the distribution and customization of sensitive documents relating to the core interest of business, intellectual property, and so on.


  • Virtual data rooms supersede ordinary online file storage systems because they are specifically designed for corporate and secure document sharing.


Their security structure is much more reliable than standard cloud storage.  They feature audit trails, compliance reports, digital rights management (DRM), and an ability to revoke document access though the files may have been downloaded to a user’s computer.


VDRs' document sharing is centered on protecting the client and their files, while absolutely retaining information ownership for clients.


It's time to retire Physical Data Rooms


-Physical data rooms were used for many decades, and indeed, they served, and still do, corporate organizations and global entities well.


-Problems are attached to using physical data rooms, including difficulty in accessing information, and sometimes, safety and security of data.


-Even though physical data rooms had special locks and keys that only high profile personnel could access, there were still inherent security risks involved with this method.


-If one of the personnel entrusted misplaces a key, then it can fall into the wrong hands, meaning a fraudster can have access to all the organization's data in one breath.

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-sending information is slow and can be time-consuming


And finally, in the event of an accident such as a fire outbreak, a building collapse, or another catastrophe, all the important, classified files could be lost suddenly within the twinkling of an eye.


All these are problems associated with physical data rooms, and they generally affect the performance and effectiveness of corporate organizations, including M&A organizations.

What to look for in a VDR

As a corporate organization, it is important to have full details about the company you want to depend on for services relating to virtual data storage rooms.


Nevertheless, here are some basic qualities of a secure virtual data room service:

1. Infrastructure Security

The provider hosting the information and the available network security protocols should be known. There should also be provisions such as sufficient SSL security encryption, effective intrusion, and virus protection.


A secure VDR service must have met the minimum-security standards required by organizations such as Securities Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), Federal Trade Commission (FTC), and so on, in America.


One other important infrastructural requirement is the SSAE 16 Type II Data Center certification.

2. Access Security

A good and secure VDR service should have a custom control feature for who can access the data in a VDR and who can't access it. It should be able to revoke access when an intruder tries to break-in.


Furthermore, it should provide custom access for different levels of workers. For example, there'll be people that can view, edit, download, print and save; and there'll also be people who may be permitted to view only. A good VDR service must put all these together.

3. Audit Tracking

This is one aspect of a good VDR service that can't be neglected. It must be able to trace and keep a record of all the activities carried out in a virtual data room so that it will be easy to exactly specify who carried out transactions, and what transactions were carried out.

Other Things to Look Out for

When considering a good VDR service you should consider going online to read reviews, check for specifications, price, and so on sites like Capterra or G2crowd.