Why do people choose data room software for business transactions?
Here are some statistics on why data room software plays such a significant role in dealmaking:
- 40% less time spent conducting due diligence
- 99.9% guaranteed data security
- 80% more time-efficient than a traditional data room
- up to 85% cost reduction
- 50 times faster document review with the implementation of AI
- up to 90% of due diligence can be managed within a virtual data room
What to consider when choosing a data room provider?
Considering the fact that there are many virtual data room providers on the market, choosing the one for your company’s needs might be challenging.
Many users face difficulties when deciding which virtual data room software to use due to the lack of understanding what exactly they need from an online data room service.
Considering the fact, that the average cost of data breaches in the United States in 2021 was 9.05 million dollars, security is obviously what matters the most. But what else? And what features are important for data safety? This is what I cover further.
So, what to pay attention to when looking for a reliable virtual data room?
The main criteria are:
- Market presence
- Experience
- Price vs. quality ratio
- Expertise
- Deployment
- Technical support
- Feedback
After thorough research of the data room market based on these features, I defined two major players — iDeals and Intralinks.
As an illustration, let’s compare these two vendors in more detail.
#1. Market presence
When we talk about market presence, it’s important to notice how long the provider is functioning, what companies are in their portfolio, and what their experience is all about.
For instance, dealing with a newbie in the virtual data room industry might not be as promising as you would expect, especially for enterprises.
I managed to find that Intralinks was established back in 1996, while iDeals emerged in 2008.
Both companies have years of experience and are chosen by notable clients. After a quick research, I found out that L’Oréal, Starbucks, and Credit Suisse have worked with Intralinks. Whereas giants like Deloitte, Toyota, and American Airlines preferred iDeals. And these are only a few examples.
It’s worth mentioning that this information is open and easy to get — it only took me a few clicks to find it. In my opinion, this speaks loud about companies’ transparency and makes me, as a potential customer, trust a vendor a bit more from the very beginning.
#2. Experience
Knowing the date when a particular virtual dataroom company was founded is still not enough to start considering it for your business needs.
Always search for a solid track record and evidence of the company’s ongoing evolution.
Even the fact that the company has been operating for decades might mean nothing if there are no changes in its growth since its launch.
When it comes to the particular vendors I was reviewing, the proof of their evolution is obvious.
I’ve figured out that Intralinks was acquired by SS&C Technologies in 2018. It definitely speaks of the provider’s desire to grow bigger.
Whereas iDeals, despite being younger, has already acquired BoardMaps in 2019 and made it another successful business direction. I see it as an undeniable sign of the company’s growth and ambitious goals for the future.
#3. Price vs. quality
Naturally, all the data room providers you’ll probably consider will differ in price. But what’s important here is whether that cost is justified by the set of features a particular vendor offers.
While it might seem logical to go for the lowest price, you should better dedicate a little more time to the investigation and find out why a particular vendor has that price model and whether it fits your business needs.
To make an informed decision, also do this:
- Make sure a certain data room provider offers a convenient price model based on your requirements.
- Evaluate your project’s size, needs, and specifics.
- Look for hidden payments and unclear costs.
When it comes to the pricing of iDeals and Intralinks, I find both vendors rather expensive. But the key point here is that you don’t only pay for the features themselves when buying a subscription. You also create the ongoing relationship with a brand, sales, and support and “purchase” the service.
What disappoints me as a potential subscriber the most is the absence of pricing details on iDeals and Intralinks websites. I would appreciate having a chance to do at least minimum research myself before contacting the sales.
However, I was able to get all the particulars about pricing only after contacting the support team. This is not very convenient, especially for those companies that only start thinking about implementing virtual data rooms and just look for options.
Still, iDeals at least provides a detailed description of what exactly a user gets when purchasing a specific plan. This way, you can figure out what will fit your needs the best without the need to contact the sales or support department.
In terms of price and quality ratio, iDeals and Inralinks differ as well. When examining each vendor, I’ve come up with the following observations:
- Intralinks has no free trial. iDeals offers free 30 days to test the software. This is especially useful for small-sized businesses that don’t possess big budgets yet.
- High pricing presupposes outstanding performance, extreme user-friendliness, and a set of unique features. Though the variety of services provided by Intralinks is wide, I can’t highlight anything specific that would differentiate it from others and justify the price. On the contrary, iDeals seems to find the balance between the price and quality of features offered.
- iDeals seems to be more flexible and loyal with their customers. After getting pricing details, I realized my company just couldn’t afford any of the vdr data room plans. But then, a manager offered us a customized plan with a unique set of features based on our company’s requirements. This allowed us to get the product, but for less money and without needless tools we weren’t going to use anyway.
#4. Expertise
It’s always a good idea to go for a data room provider that specializes in the same industry your business operates in. This way, you can be sure a particular vendor is able to provide you with the features that will best fit your needs.
Conduct a little investigation on what virtual data rooms your main competitors use and how they profit from their services.
I’ve come to the conclusion that my company’s requirements would be best met with the help of iDeals and Intralinks providers.
However, after thorough research of the clients’ listings on Intralinks and iDeals websites, I’ve determined a slight difference between their spheres of use.
Intralinks is mainly used in such industries as finance, legal, life science, and energy.
Whereas iDeals generally comes in handy in investment banking, legal firms, life sciences, business consulting, manufacturing, and real estate.
To my mind, both vendors would fit the needs of rather medium- or large-sized companies. Nevertheless, startups could also benefit from implementing these data rooms but still would better prefer iDeals.
#5. Deployment
The technological adaptability of a virtual data room vendor is also important.
It’s great when you and your clients or potential investors can reach your dataroom from any device. This way, you enhance your chances of closing the deal and actually win the prospective bidder’s attention and appreciation.
When it comes to the deployment options of iDeals and Intralinks, I’ve found out that both software products are web-based and quite flawlessly operate on Windows, Mac, and Linux.
To try both vendors out, I didn’t need to install any extra plugins, which greatly simplified the usage. This is especially valuable since not all data room users are supposed to be tech-savvy.
The fewer efforts are needed to navigate a particular virtual data room, the better.
What I enjoy the most about iDeals and Intralinks is that both vendors have mobile applications for iOS and Android.
This enables your potential bidders to view documentation even on the go and allows you to effortlessly manage the access permissions or provide answers in the Q&A section anytime.
#6. Technical support
Being able to reach support any moment you face difficulties with using data room software is essential. When you’re paying for the service, that service should be high-quality.
A dedicated and knowledgeable support team often affects the brand’s reputation more than anything else.
To ensure every subscriber gets first-rate assistance if any problem appears, I’ve tested the customer support of both iDeals and Intralinks. This is what observations I’ve come to:
- Each vendor offers a few contact options: phone, live chat, and email.
- What I especially enjoyed was that non-English speaking clients can get help in their native tongue. Support teams of Intralinks and iDeals speak more than 10 languages.
- The speed of chat response was not more than 30 seconds with iDeals and striking 6 seconds with Intralinks. Obviously, the support team of Intralinks answers you lightning-fast. But I’ve also noticed the quality of the help they provide can be questionable, as their comments were sometimes general and not case-specific. For instance, when I mentioned I experienced ongoing bugs, the only answer I received was a recommendation to change the browser. I find it unprofessional.
#7. Feedback
The best way to assess the quality of a particular virtual data room is to search for real user feedback.
Too often, general ratings don’t say much about actual software’s performance. In comparison, customers’ feedback can provide you with more details.
To have a complete picture of iDeals and Intralinks, I’ve studied what previous and current subscribers say about each provider. These are my key observations:
- Intralinks has significantly fewer user reviews in comparison to iDeals. This speaks loud about iDeals popularity.
- The most frequent comment clients state about iDeals is their extreme user-friendliness. And I can certainly relate to that. It was easy for me to set up and configure the software. I’ve uploaded all the documents in seconds, thanks to the drag-n-drop and bulk options. And I especially enjoyed the automated indexing of newly uploaded files, which reduced the need to manually rearrange them in order.
- The majority of Intralinks’ customers note that the software suits the needs of enterprises more than small or one-person businesses. They also indicate that the UI and UX are dated, and data management can be quite troublesome. My experience with Intralinks was pleasant in general, but I confirm the complicated setup and configuration. I found out that the automated numbering doesn’t work sometimes, and it suddenly logs me out at some stages. However, I noticed that uploading and sharing large files is fast.
What conclusion have I drawn based on the Intralinks and iDeals comparison I performed?
- Intralinks is a great option for large enterprises. I’ve found out that it’s often used in such industries as finance, legal, life science, and energy. The software has years of experience and offers many features for secure data sharing and storing. Though the interface is sometimes clunky and dated, the overall usage of Intralinks isn’t that bad. However, small companies might want something more user-friendly and easy to understand.
- The iDeals VDR will suit the needs of not only big companies but small businesses and startups as well. The common industries where iDeals comes in handy are investment banking, legal, life sciences, business consulting, manufacturing, and real estate. I’ve figured out that the main trademark of iDeals is its user-friendliness, which makes it a favorite virtual data room software for many firms (and that’s what the majority of customers indicate in their reviews).
Checklist for choosing a reliable VDR provider
- The provider has been on the market for a long time.
- The provider has less than 10% of negative user feedback.
- The provider knows how to work with both small companies-of-one along with global brands with a large number of employees.
- The provider has an SLA.
- The provider guarantees a particular response time to the customer support team.
- The provider has clients from your industry.
- The provider’s technical solution meets the needs of your business (95% or higher).
- Regardless of the client’s attitude towards cybersecurity, the provider focuses on protecting data.
- The provider constantly introduces innovations to make the user experience within the VDR faster, more convenient, and easier.
The most important criteria for choosing a VDR provider is a “crash test.” It’s the examination of data room services during the trial period. To be sure that the chosen provider will suit your company’s needs, you should test its work in every way possible. Anything from “dumb” questions to the “this feature doesn’t work properly” scenario goes.
But, before proceeding to a trial, your team must prepare and choose a provider. To make it easier for you, we have arranged a small guide on how to select a virtual data room and its provider among dozens of virtual data rooms.
Top 10 reasons why businesses use virtual data rooms
- Secure sensitive information sharing and storing
- Company’s digital data protection
- Full user management control
- Access to multiple projects at the same time
- Secure remote access to business documents
- Easy search for required data
- Cost reduction due to a paperless office
- Instant interaction with partners and colleagues anywhere in the world
- Automatic data analytics
- Time saved during bulk document uploads
What are virtual data rooms used for?
Virtual deal rooms meet the requirements of many industries and projects. But several use cases fully depend on data room providers.
- M&A. Virtual data rooms for Mergers and Acquisitions take up a large portion of the market. The best data room providers for M&A enable users to significantly streamline the due diligence process by simplifying and securing large-volume document sharing.
- Due Diligence. An online data room is generally the most optimal solution for intricate due diligence procedures. That’s why many secure data room services offer templates and checklists to their users.
- Real Estate. Similar to M&A data room providers, virtual data rooms that cater to Real Estate know just how complex and multi-layered their customers’ needs are. Templates and versatile file compatibilities usually come in handy in such cases.
- IPO. Filing an IPO is yet another multiple-stage process that sometimes requires the expertise of third-party experts. Virtual data room software allows users to organize the process in the most straightforward way and avoid data confidentiality concerns.
- Corporate storage. Switching from a physical filing system to a Virtual Data Room can visibly cut down costs, support the company’s green initiative, and increase document safe-keeping.
- Fundraising. Raising funds typically translates into sharing data with an unlimited number of potential investors. Virtual data rooms enhance this process by allowing admins to closely monitor any activity, regulate access, and restrict unwanted downloads and sharing.
- Banking. Banks handle a lot of personal data that can be subjected to identity theft and other criminal activities. Utmost security and confidentiality that come with data rooms are irreplaceable in banking and other financial transactions.
- Corporate Development. Arranging all the necessary information in a secure data room allows businesses to oversee the big picture, pick up on trends and weaknesses, and develop suitable developmental strategies.
- Startups. One of the key data room features for startups is monitoring each visitor’s engagement. By evaluating the time spent on every item, virtual dataroom administrators can improve the data flow and structure to stimulate the interest of other potential investors.
What functionality should a data room have?
It is important to understand every data room’s mechanics to be able to choose the most suitable one among available virtual data room solutions. Below are some of the key features found in the best virtual data rooms:
Document security. The best data rooms will implement several levels of security, including:
- Dynamic watermarking
- Fence view
- Remote shredding
- Adjustable document
- Download and screenshot restrictions
- Encryption
Access security. A secure Virtual Data Room will also allow you to adjust access privileges for every member. You will be able to establish a priority level framework, limit access to any item inside the data room, and regulate access from specific devices and locations.
- Access control and expiration
- Time and IP access restriction
- Granular user permissions
- Two-factor authentication
VDR security compliance. Reliable electronic data room providers are usually open about their certifications and compliances. The security benchmarks you want to look for are:
- ISO 27001
- SOC 2
- SSAE 16 (particularly for M&A)
Document management. The virtual deal rooms are the most effective when managing documents is seamless. You will want to see features such as:
- Drag-n-drop upload
- Bulk uploading and downloading
- Diverse format compatibility
- Automatic indexing
- Full-text search.
Ease of use. You don’t necessarily need to have years of experience dealing with Virtual Data Room service providers to judge the ease of use. A data room software is likely to be user-friendly if:
- You don’t need plugins to run it
- The services are available in multiple languages
- There’s an option of a single sign-on
- There are apps for iOS and Android
- You can quickly swipe and scroll between different items in the data room
User management. Regardless of the size of your project, you will need to manage and supervise all users for security reasons. Virtual data rooms will offer handy tools for:
- Bulk invitations
- Group access regulation
- Notifications
- Detailed user permissions
- Viewing permissions
Customer support. Another important criterion for comparing online data room providers is the support team. More specifically, you are going to look at their availability, response times, and communication channels, and these features:
- Live chat
- Personal manager
- 24/7
- Phone & mail
- Call center
Speed & Availability. You can judge the performance of any given Virtual Data Room by the following:
- Speed of uploads and downloads
- Uptime percentage
- Minimal number of maintenance windows
Customization. Making the data room look and feel like a part of your company can be a great asset. Some of the VDR customization features include:
- Adding brand colors and logos
- Enabling automatic translation
- Custom watermarks
Q&A. Data rooms often play the role of virtual meeting spaces. That’s why established Virtual Data Room providers include instruments for interactive information gathering and analytics. For example, a complete Q&A toolset will feature:
- An FAQ section
- Live discussions
- The option to restrict access to specific threads
- An ability to assign experts
- A Q&A report generator
Compare virtual data room services
| Virtual Data Room | Rating | Deployment | Best for |
|---|---|---|---|
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M&A, Due Diligence, Real Estate Management, Fundrising, Investment banking. Small, Medium and Large businesses. |
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Large corporations, long-term projects. M&A, Due Diligence, litigation. |
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For the organization of work and communication with employees and clients, data exchange. Used in tourism, real estate, information technology. |
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M&A solution for businesses in any industry. Suitable for short and long term projects. Due diligence. |
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For small, medium and large businesses. Used for the secure exchange of files and documents within the company and with third parties. |
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Beneficial to use for managing large corporation transactions: M&A, fundraising, due diligence. Also for government agencies and global companies. |
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Mergers and acquisitions, due diligence and contracting. Suitable for use in the international market for medium and large businesses. |
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Used as a corporate repository, software for managing boards of directors, document flow within the company. This is a good solution for large businesses and long-term projects. |
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For short and long term transactions for clients from 3 people to large companies. Safe exchange of confidential data in the cloud. |
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Safe exchange of corporate data, short-term and long-term transactions. It is used in the financial sector, real estate management, for small and medium-sized businesses. |
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For the secure exchange of files and data within the company and with third parties. Suitable for clients of any size and personal use. |
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M&A, IPO, fundraising transaction for clients of any business size, including large corporations. Suitable for international transactions. |
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Trusted data room solution for clients from financial institutions, investment funds. The best solution for large banks. |
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For M&A Deals, Board Meetings, Legal Proceedings. Digital rights management (DRM) software for videos, PDF, Office and OpenOffice files, TXT files, and images. |
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Deal management and project collaborations for small, medium, and large business clients. For short and long-term deals online. |
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For short-term transactions of small and medium business clients. Used by startups for fundraising and initial public offering. |
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Organize and exchange confidential documents during Due Diligence and Dealmaking for medium and large businesses. Used in litigation, life sciences, investor communications. |
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For mergers and acquisitions, real estate management, asset lifecycle management, IPOs and capital raising operations. For clients of all business sizes. |
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M&A, Due Diligence, Real estate management, Fundraising, Investment banking services. Clients of all sizes, including startups and corporations. |
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Used as a digital workspace for secure, enterprise-grade file sharing. Best suited for large corporations, businesses, long-term transactions. |
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The best solution for personal use, file sharing. It is used for organizing document flow within individual departments.The best solution for personal use, file sharing. It is used for organizing document flow within individual departments. |
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Share confidential documents with investors, consultants, business partners on the Polish market. Used for mergers and acquisitions, due diligence, business transaction management. |
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For secure file sharing, for short-term financial transactions, due diligence. Chosen by managers of small and medium businesses, for short-term use. |
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Solution for the Australian and European M&A market. Suitable for small and medium business clients for short and long term deals. |
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The best solution for the German M&A market. Complies with European safety standards. |
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Software for M&A transactions in the European market. The best solution for organizing transactions on the German market. |
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For managing legal processes, law firms, corporate legal contract management. |
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IdrShare’s owners have now launched a new software, Mineral Box to help mineral royalty owners manage mineral ownership data. |
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For lifecycle management of contracts, mergers and acquisitions, loan syndication, private equity transactions. Used by small and medium-sized companies in various industries. |
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For Italian business owners. Used for digital workplaces, due diligence, board of directors, stock exchange listing, NPL, arbitration, internal audit, fundraising, real estate. |
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Cloud file transfer and collaboration apps for German market managers. For team communication, tasks of joint work on projects, exchange of business data with external partners. |
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Used by small business owners for short business transactions in the German market. |
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Software solution for conducting business processes mineral owners and mineral managers. |
Frequently Asked Questions
Virtual data room (VDR) or Deal Room is electronic storage that differs from other programs in additional functions and grades of safety. The platform overshadowed traditional storage. It took a little time because a vdr offered businesses previously unknown tools. Administrators have a lot of tools to manage access. Users receive permissions to work with certain data and for specific actions. In any case, managers can restrict access for each guest or authorized person. Up to this point, no programs have managed to break the integrity of this tool.
A virtual data room is a secure virtual space that serves multiple essential functions:
- Confidential data storage and sharing
- Communication and collaboration with people inside and outside the company
- Digitalization of the company’s workflow and dealmaking
The decision to purchase data room software is not usually specific to a position. Depending on the company’s size and segment, virtual data room obtaining and administration might be the responsibility of anyone from an office manager to the CEO.
The best virtual data rooms will guarantee 99.9% security. One way to confirm such statements is to check the data room provider’s standard certificates, such as ISO 27001, SOC 2, or SSAE 16.
A traditional data room is a physical space that contains large amounts of data. Typically, traditional data rooms have access restrictions and intensified security.
The main advantage of a virtual deal room over public-access cloud storage is security measures. A data room will implement more strict protective protocols and monitor every user’s activity in detail. Plus, virtual data room providers often provide additional tools for making the user’s VDR experience more effective and convenient.
Data room providers often use cloud technology to store users’ data, a data room is not the same as a public access cloud storage platform. The critical difference is the security measures featured in virtual data room software. For example:
- Multiple-step verification
- IP-based access restrictions
- Dynamic watermarking and fence view of the documents
- Adjustable restrictions on retrieving and sharing the data
- Various levels of access privileges
Data room software operates as an extranet that can be accessed via the Internet. Essentially, virtual deal rooms are highly secure storage spaces with an option to modify data, communicate, and enhance the workflow from anywhere in the world.
Depending on your task, you can request a checklist of the items to include in the data room from the VDR provider. For example, virtual data rooms for Mergers and Acquisitions will need to feature sections like employee information, intellectual property documents, director board materials, financials, major contracts, and others.
In case you have never used a virtual data room, the best data room providers will always have a training program in place. Depending on your company’s size and the overall technological literacy of all the VDR users, it might take anywhere from 15 minutes to a few hours to fully comprehend how to use the data room in your case.