The Different Types of Virtual Data Rooms and Their Features
Virtual data rooms (VDRs) enable organizations to securely share sensitive documents and collaborate in complex business transactions.
They have a wide variety of use cases that include Mergers and Acquisitions (M&As), Initial Public Offerings (IPOs), due diligence and fundraising.
The popularity of virtual data rooms has spiked the past few hours, with more and more organizations adopting a digital-first business approach.
Data room providers have evolved into multiple types that suit different business use cases, and here, we’ll dig into the different types of virtual data rooms and their key capabilities.
1. Basic virtual data rooms
Basic virtual data rooms are the most basic type of VDRs and are ideal for small businesses or teams. They offer simple yet secure document sharing, version control, and limited user access.
They are usually offered as a cloud-based solution, which means that users can access their documents from anywhere with an internet connection. However, even the best data rooms typically do not offer advanced features such as AI-powered search, redaction, or watermarks.
2. Customizable virtual data rooms
Customizable virtual data rooms are designed to meet the specific needs of the user. These VDRs offer a high degree of customization, including the ability to create custom workflows, branding, and user interfaces.
Customizable data room services are top virtual data room providers for large organizations and enterprises with complex requirements, such as legal and financial institutions. As Gilbert Waters, CEO of a reputable data room review website mentions, “Customizable data rooms should offer advanced features such as dynamic watermarking, granular user permissions, and advanced analytics. These make sure the user experience is as seamless and personalized as possible.“
3. Industry-specific virtual data rooms
Industry-specific virtual data rooms are tailored to meet the unique needs of a particular industry.
For example, healthcare organizations may require virtual data rooms that are compliant with HIPAA regulations, while financial institutions may require VDRs that are compliant with SEC regulations.
These online data room software solutions offer industry-specific features, such as compliance tracking, data encryption, and data backup.
4. Mobile virtual data rooms
Mobile virtual data rooms are designed to be accessed from mobile devices such as smartphones and tablets.
These electronic data room tools offer a mobile-optimized user interface that is easy to navigate on small screens. They are ideal for users who are always on the go and need to access documents from their mobile devices.
Mobile virtual data rooms also offer features such as two-factor authentication, remote wipe, and mobile-friendly document previews.
5. AI-powered virtual data rooms
AI-powered virtual data rooms are designed to leverage the power of artificial intelligence to enhance document management and collaboration. These tools use machine learning algorithms to automate document classification, tagging, and indexing. Additionally, They incorporate features like intelligent search, predictive analytics, and automatic redaction.
AI-powered virtual data rooms are best utilized by organizations that deal with large volumes of data and require advanced data analytics capabilities.
6. Hybrid virtual data rooms
Hybrid virtual data rooms combine the best of both worlds, offering both on-premises and cloud-based solutions. They offer the security and control of an on-premises solution with the flexibility and accessibility of a cloud-based solution.
Hybrid virtual data rooms are ideal for organizations that require a high degree of control over their data but also need to collaborate with external partners. They offer advanced features such as data encryption, granular user permissions, and data backup.
Final thoughts
To recap, there are many types of virtual data rooms, and depending on your business needs and requirements, you may favor one type over the other.
It’s best to discuss this with your team and compare different data room vendors with an online data room comparison before deciding on one.
Of course, you should also consider certain restrictions such as your company’s budget. More advanced data room solutions typically cost more than the ones with basic capabilities.
