Why per-page pricing is masking the true cost of your VDR

Imagine your company is working on an important transaction, such as a merger or acquisition. You have all the details planned and monitored, including the budget. So you know how much you or your client expects to spend on deal execution, including the cost for critical tools such as virtual data rooms. 

However, by the end of the deal, you realize your data room has unexpectedly cost 5x or even 10x the price you were initially quoted. Would you be happy paying for it?

This is a common problem for dealmakers, caused by a misleading pricing model used by legacy data room vendors. 

This article discusses the problem with ‘per-page pricing’ when using a virtual data room (VDR) and explains why it leads to hidden costs for dealmakers.

The ‘per-page pricing’ approach explained

The per-page pricing model charges you for each page uploaded in a VDR. 

But how many pages do you need if you’re used to storing data in MB or GB? 

Legacy VDR providers offering per-page pricing typically convert MB and GB into pages. Usually, you can get an estimated per-page quote and a price for one page. 

The proposition might look like this:

It seems clear, right? And you’d rightly assume you know what you’ll be paying for your VDR. But it can be a trap. 

Legacy providers often don’t provide users with clear reporting of the storage usage in the VDR, which can turn into a big surprise when the final invoice arrives. Here’s how it works.

What counts as a page? 

Typically, a page refers to one page of a standard PDF. 

However, you generally upload more than just PDF files to a data room. A transaction involves piles of documents in different formats: Images, Excel spreadsheets, PowerPoint presentations, videos, audio files, zip files, and more. 

How do you calculate pages in an Excel spreadsheet? And what about video and audio files? 

Vendors with a per-page pricing approach offer a solution: the size of each file is converted to pages. For instance, they might offer this formula: 8 KB = one page. 

Here’s what you might get when uploading a 30 MB non-PDF file, such as Excel or PowerPoint, for instance (for $0.4 per page price):  

Note: 1 MB = 1,000 KB

It means that for a single file that constitutes 3% of all the data you plan to upload (out of 1,000 MB), you already pay almost 38% of the estimated total cost ($4,000). 

And what if you have 10 or 50 more such non-PDF files to upload? The final cost might rise significantly.

The concept of ‘special media’

There’s one other trick you need to know about. 

Vendors with a per-page pricing approach consider images, videos, audio files, etc. as ‘special media’ and typically charge for them separately. As a rule, the price for such files is much higher. It can be as much as $10 per MB. 

Let’s say 15% of all the data you plan to upload to your VDR is special media. This is what price you might get for it:

As you can see, the cost of special media might constitute more than a third of the initially estimated total cost ($4,000). And what if special media make up more than 15% of the total amount of data you plan to upload?

Three main financial risks of per-page pricing

The per-page pricing approach carries three main financial risks. 

• Hidden costs for different file types

As described above, vendors with a per-page pricing model might have different ways of classifying a page in your VDR compared to how other, non-PDF files, are converted to a page. 

When you have a large amount of data to upload to a virtual data room, you usually don’t group your files based on their type. You only know the total size of it. 

Let’s assume 1,000 MB of your data is divided into these categories:

• PDF: 70% 
• Excel: 10%
• PowerPoint: 5%
• Special media: 15% 

Here’s what your actual spending might look like:

Note: 8 KB = 1 page, 1 page = $0.4, 1 MB of special media = $10 

Therefore, the actual cost for your VDR spikes to $11,980, which is about 3 times bigger than the original estimate of $4,000:

• Time overages

Additionally, there’s a question of how your vendor manages project extensions. 

It’s not unusual for transactions to take longer than you expected. What happens to the cost of your VDR if you end up using it for a month longer than initially planned? And what if you need three more months?

Vendors with a per-page pricing approach commonly add on extra penalty charges for customers that exceed the initial term limit. Rather than charging a prorated cost (i.e. extending the same monthly rate for the initial data room), these vendors will charge 2x or even 3x more for the additional time.

This chart shows what that looks like in practice. You might expect that your contract would just be extended at the same rate as initially agreed, but instead you’re hit with penalty charges that inflate the cost to a much higher rate.

With an Ideals VDR, any contract extensions will be charged at the same rate as in the original contract, so you know exactly how much the additional time will cost.

• Total uploads vs. data amount billed

Another issue with a per-page pricing model is how the number of total uploads is handled. 

In the process of preparation for due diligence, for instance, you probably delete some documents from the data room to make some edits. You then upload those documents to the data room again. 

And here’s a surprise: you’re charged for them again. Legacy vendors will typically charge you for each page you upload, even if you edit and re-upload the same page more than once.

And what if you need to make updates 10 times for a single document? This way you pay 10x for one file. And considering that there are hundreds of documents with thousands of pages in a data room, your total cost for VDR services can skyrocket.

Ideals’ usage-based pricing and its transparency

For Ideals, client trust is crucial. That’s why we offer a simple and transparent pricing model so you know what you’re paying for, with no surprises. 

• Usage-based model
  You only pay for the amount of storage you need to use. No pages, only GB and MB, just like on your computer. It means you don’t need to do extra guesswork with counting your files based on their type and converting them to pages.
• No extra charges for extensions
  When your deal or project is prolonged, the price for Ideals services remains unchanged. The total cost is prorated based on your project length.
• No extra charges for the number of uploads
  You only pay for the storage space in GB and MB, no matter how many times you delete and upload the same file again.
• Notifications about going over the limit
  You can turn on instant notifications to inform you when you upload more data than your plan allows, so that you won’t need to pay more in the end.
• Simple storage reporting
  Our straightforward reporting shows how much of your data you’ve used and which files are taking up the most space, helping you optimize your storage and ensuring you don’t accidentally exceed your limits.

Usage-based or per-page approach?

You choose.

Client success stories: Avoiding hidden costs with Ideals 

Our clients appreciate the transparency and predictability they get from our usage-based pricing model Ideals offers. Here’s what they say:

• “I like their pricing plans, which are right-sized for user needs.” — Eric D., General Counsel
  
• “In addition to being one of the best available VDR options, its price is also extremely competitive.” — Ahmed E., Senior Vice President
  
• “Compared to many other providers, the price structure is fair, so that customization is also possible for individual needs.” — Anonymous user in Consulting
  
• “A well-designed and competitively priced offering.” — Martin G.
  
• “The pricing structure is competitive and not based on a per-page use, but rather on storage size, aligning well with the functionality provided.” — Anonymous users in Renewables & Environment.

To sum up

A per-page VDR pricing model might be something you’re used to, but it comes with hidden costs that can significantly increase the overall cost of your contract. Legacy providers offering a per-page pricing approach charge extra for contract extensions, different media files, and total uploads.

With our usage-based pricing model, you have total clarity on how much your data room will cost, empowering you to focus on your deals without worrying about unexpected charges.