The Fast-Moving Evolution of Virtual Data RoomsAuthor: Kathryn Gaw
It is impossible to argue against the fact that they way in which we communicate with each other has changed significantly over the last ten years. The shift has been driven by the prevalence of smartphones, the growth of the internet and the popularity of social media, but in the business world there is another driver of change – virtual data rooms.
Essentially an online repository of information, virtual data rooms evolved from the age-old business need to be able to share and collaborate on sensitive information. Where physical data rooms of the past were inconvenient and costly, virtual data rooms were intuitive and online. Their ability to facilitate the sharing of large amounts of data lead to them becoming highly popular in data intensive industries such as finance and law, where they have lead the push towards efficiency gains and reduced costs.
Virtual data rooms’ effect on communication between businesses was largely insignificant in their traditional use as data repositories, but over the last few years their purpose among businesses is shifting to include wider corporate collaboration and communication, not just during the due diligence process of deals.
Virtual data rooms have been the preferred data solution for companies for many years now due to their superior security and data protecting offering when compared to network servers or emails. In recent time, virtual data room providers have started to incorporate chat rooms and Q&A functions into their platforms as a means of facilitating secure discussion. As with anything in a virtual data room, the interactions are securely stored in the cloud and an audit or report of all communications can be summoned at an instance.
While one-on-one communication in everyday life is usually sufficient, global business is rarely performed between two individuals, so the need for secured group communication, as if sitting in a boardroom is apparent. Being online, virtual data rooms have the flexibility to create designated groups that can work separately on projects and then communicate together on wider business processes. In transactions or potential deals, bidding parties can be added to the discussion and their interactions can be monitored and managed as the deal progresses.
The shift away from being a data warehouse and towards a facilitator of communication is crucial in virtual data rooms survival into the future. As people becoming more trusting of cloud computing and cloud storage and as data storage prices fall, virtual data rooms will need to offer something more than just a storage solution to businesses.
If providers can come up with a slick, easy to use interface that has the ability to incorporate all employees at varying levels of a company, they might well be the future of virtual offices and the future of digital business. The opportunities a completely digital workspace could provide are endless, but unfortunately it is likely to be a good many years before we see any fully virtually-operation companies.
The more immediate transition by end-users of virtual data rooms is towards using the platform during earlier, less data intensive parts of the deal, such as managing workflow, discussing potential buyers/sellers and preparation for large scale corporate transactions. Their simplicity and security have made them popular among previous users who have started to prefer discussion pre-deal processes within the virtual data room as opposed to on email. Other than being more secure, preparing documents and discussing strategy on a virtual data room has the added benefit of preparing the business to interact with bidders on the same platform once the deal process is initiated. This ensures that everything is in place well in advance to help minimize any delays and eliminate any errors.
Secure data room providers have recognized this shift and have started to focus research and development on improving the user interface and compatibility of virtual data rooms without compromising on their features or security. The ideal is for their platform to be available across a host of platforms, including mobile and tablet, and easily accessible on each platform by using secure keys and login details so that businesses can always be prepared for more deals. Being on mobile devices will also likely lead toward an increase in the use of virtual data rooms as a means of communication.