Virtual Data Room pricing is a major decision-making factor in VDR software selection. But for first-time users, current data room prices may seem unreasonable. That’s why it is essential to explore the various aspects that contribute to virtual data room cost calculation.
Going through the prices of various providers, you might notice that they can significantly differ even though the features seem similar. Not all virtual data room providers publish their prices and software tariff plans. Typically, this is because the price is formed individually for each client, depending on his needs. In the article below you can find how the VDR price is formed.
What affects virtual data room pricing?
The virtual data room software market is rich in offers. However, most of these offers can be put in two different categories. The first one is a category where customers come to the vendor, get a quote on their needs, and proceed to the purchase. The second category provides predefined plans, one of which may be chosen by the customer. Just like any other product or service, the virtual data room has its price. Data room services are not cheap because the technology behind this software is sophisticated and resource-demanding. However, virtual data room pricing consists of a list of different components, which includes but doesn’t limit to:
Virtual data room technology replaced physical deal rooms that used to be popular up until the last decade. The most significant technical challenge for most VDR providers is facilitating fast and secure data exchange by maintaining complex servers.
The data center’s physical location, encryption technology, certifications, guaranteed uptime, and many others factors contribute to the maintenance costs and, consequently, virtual data room pricing.
- Note: Reliable VDR providers perform regular audits to ensure their data-storing solutions are up to par with the industry standards. ISO 27001, SOC 1 or 2, GDPR, HIPAA, and other certificates and compliance regulations serve as confirmation of top-level practices.
The more gigabytes of online storage the customer needs, the more money should be spent. In this case, one has to consider the online data room, just like any other online data-sharing service. For instance, online sharing platforms provide 15 GBs for free, and if the user requires more, specific fees apply.
Provider security certifications
Superior hardware quality creates a platform for sophisticated security software solutions. However, the practical approach to data safekeeping still varies among providers. For example, some VDRs offer IP-based access restrictions and multi-level user rights, while others don’t.
The number and quality of these security features will play a significant role in virtual data room cost calculation. Mainly because it takes great resources and effort to ensure each technical component is operating effectively.
- Note: From the user’s perspective, not all security features are equally crucial. The final requirement will depend on the company’s size and the particular project. This way, large enterprises will look for things like single sign-on, remote shred, and dynamic watermarking, while smaller firms may not.
Virtual data room tariff plans often vary based on the set of included characteristics and features. Similar to the security controls, the users can choose between versatile functionality and straightforward, limited-capacity options.
Logically, the virtual data room pricing will vary depending on the VDR’s features and capability. While the rule of thumb is often, “the more that is included, the higher is the price”, many providers consider certain feature groups as basic and don’t charge extra for them.
- Note: VDR templates and checklists are typically free and can serve as a great asset in the data room setup.
The online data room software is rich in features, some of which may be unnecessary for the potential user. In this case, to keep a reasonable price, online data room vendors provide their potential customers with a right of choice on which features to include and which to revoke.
A decent virtual data room service provider will include the customer support service in the overall price. However, there are instances where a customer can extend the list of services with such features as:
- 24/7 support
- Multi-Language Support
- Live Chat
- Personal Assistance
- Online Help Center
This is just a simple list of what may be included in the customer service pack. The more online support services the client chooses to have, the more resources they have to spend on it.
Helpful customer support adds tremendous value to modern VDR technological advances. The support agents guide users from the beginning, assisting with setting up the data room, training all participants, and solving any potential technical issues throughout the process.
A noteworthy VDR provider will offer 24/7/365 multilingual support with various communication channels with short response times.
- Note: Although the support team’s active contribution may drive up the virtual data room cost, access to live assistance is invaluable.
Device adaptations and software integrations may also contribute to the answer to, “How much does a virtual data room cost?” When a VDR is available through most operating systems and gadgets and works well with separate tools, such as Zoom or Salesforce, its service plans will likely be pricier.
- Note: Having the option to access a VDR from any location or device increases user convenience and significantly speeds up the deal-making.
There are instances where a client wants to add additional branding to their online data rooms interface or other cosmetic features. In these cases, for an additional fee, online data room provider supplies their clientele with the following list of services:
- Customize Look & Feel
- Customize Watermarks
- Apply Language Settings
- Define Terms of Access
- Customize Header and Footer
- Custom Login Page
Provider brand name
A virtual data room market is full of vendors, some of which provide their service for quite an extended period. Such companies as Merrill Datasite and Intralinks possess the reputation of the creditable service providers. However, they will charge a way higher price than such modern vendors as iDeals, Ansarada, Firmex, Drooms, and others. It is essential to understand that the quality of the final product is the same.
The origins of the provider impact its pricing as well. Those vendors who exist for decades tend to have higher fees than younger ones. The fact that the provider is old doesn’t necessarily mean that it can deliver a suitable service for you. So study the features before sticking to the old-fashioned data room service.
Modern providers are usually cheaper. Or they at least offer a flexible range of prices so that the customers can choose the option that will suit their requirements. It is very convenient since you can pick the plan that will cover your needs while not paying too much for the functions you don’t need.
- Note: It is always better to look at the company’s achievements within the field and its user reviews than consider the brand as one of the primary virtual data room selection factors.
Finally, some virtual data room providers have been on the market longer than others, having created a recognizable brand, developed a customer base, and earned well-deserved brand loyalty. For instance, Intralinks, Datasite, and Citrix have decades of service and a certain sense of status that comes with their products. Such high standing often influences the virtual data room pricing.
At the same time, being in the game the longest isn’t always a guarantee of a well-rounded offer. Many users prefer younger companies like iDeals, Ansarada, or Onehub, as they provide a more contemporary outlook on deal digitization and data handling.
Why aren’t virtual data rooms free?
Every virtual data room cost structure comprises multiple vital elements. The presence and quality of these counterparts essentially translate to the success of the deal or project processed through the VDR.
This means that it’s impractical — not to mention unprofitable — for a virtual data room to be free. Although it is possible to compromise certain features and look for a less expensive solution, benefiting from the advantages that a data room provides will incur usage fees.
It’s also important to mention that established virtual data room providers offer free trial periods to familiarize users with the platform. Such demo versions usually last from between 14 to 30 days and often include many of the premium plan features to entice a potential new client.
Requesting a trial from the VDR provider is helpful when:
- It is the user’s first time using a virtual data room
- There is a need to compare virtual data room tariff plans and their value from several providers
- The user needs a substantial amount of time to get ready for upcoming work, such as during mergers and acquisitions
Virtual data room pricing models
VDR providers’ fee structure varies, and they also adhere to different virtual data room pricing models. Not understanding the fee model may lead to significant discrepancies between the initial budget and the final invoice.
Here are the most common virtual data room premium pricing plans:
- Per-page. This is the most traditional way of calculating VDR fees. Essentially, the user pays between $0.3 to $1.5 for every page of data uploaded to the data room. Per-page virtual data room pricing works for small companies and projects with limited document flows.
- Per-user. The user-based virtual data room cost approach is very common and suits most projects with a clearly outlined number of expected participants. For example, the per-user model is a comfortable solution for a corporate repository for a small to medium-sized organization.
- Storage volume. Compared to per-page or per-user virtual data room pricing, the storage-based fee model is much more flexible. The user can store any number and type of files, as long as the amount of data doesn’t exceed the volume limit.
- Usage duration. The virtual data room cost will vary depending on how long the VDR will be active. Long-term projects tend to be more budget-friendly, as many providers offer special rates to permanent and semi-permanent users.
- Flat rate. With fixed virtual data room tariff plans, the administrator selects the most applicable arrangement based on the number of users, storage capacity, number of projects, and the feature set. In some cases, it is possible to add extra services for an additional fee and switch between different tariff plans.
Choose the right VDR for your project
When narrowing down potential VDR providers, it is essential not to put virtual data room pricing first. It is better to readjust the budget and go for a pricier option than compromising a project’s outcome.
Instead of focusing on the cost, the users should consider:
How long will the project take?
In some cases, it is challenging to foresee the exact timeframe for a project. The best practice is to allow at least one extra month on top of the initial expectation to go through the deal with comfort.
How big is the organization?
A large multinational company requires much more support and processing power than a small local firm. Although many VDR providers have options for all company sizes, some cater exclusively to a particular category.
Which features are a must-have?
Digital data rooms can automate numerous processes and make the deals flow faster. With that said, not all features will provide the same value to a project. The best practice is to outline the company’s technical requirements and capabilities, as well as data room expectations, before selecting a VDR.
What is the provider’s field of expertise?
A virtual data room provider’s client portfolio can offer a good insight into the VDR’s competence in certain segments. This way, a real estate company is better off going for a data room that accommodates other real estate firms.
How user-friendly is the VDR?
The user will not appreciate elaborate hardware and software solutions, helpful support, and a wide-range feature set if the end product is difficult to use. The virtual data room has to be comprehensive, intuitive, and work on any device or platform.
Is it possible to switch plans?
It is wise to consider a VDR provider that allows upgrading and downgrading between virtual data room tariff plans. Changing plans comes in handy in many scenarios, for example, when mergers and acquisitions enter the integration stage or when a company breaks off to form several smaller firms.
How much does a virtual data room cost?
When it comes to virtual data room pricing, it is essential to go for a practical and straightforward option. Taking advantage of free trial periods and selecting the data room provider beforehand can significantly benefit the deal.
VDR free trial and demo
No matter what the price formatting process is, a decent service provider has to supply his customers with a free trial period. A demo period will help one to understand what the service is, without any marketing confetti. The demo period will make a customer familiar with how good the online data room software is, how soon will the customer department eliminate any issues with the software if there are any, and how useful the features of the software are, and so on.