5 Reasons Every Business Should Consider Using a Virtual Data Room

A virtual data room or VDR uses a series of extranets to house corporate data while making it accessible to authorized third parties. Virtual data rooms may be used to hold all of your critical files or only share in-work documents with third parties during legal negotiations. Let’s look at the five reasons every business should consider using a virtual data room.

5 reasons every business should consider using a virtual data room
Image source: https://pixabay.com/en/cyber-glasses-virtual-virtual-world-1938449/

Advanced Data Security

Virtual data room providers have the resources to provide the utmost information security for every client. Not only are the data centers protected at multiple levels, they check uploads for malicious software, implement advanced data encryption and track access logs in order to inform you when something suspicious is happening. VDRs often implement multiple layers of security such as combining a key fob and passcode with a username and password.

No More Data Leaks

Instead of downloading files from the company database and emailing it to a partner, the partners receive a link to a tightly controlled virtual data room where they can see only the files in the VDR they have permission to access. Clients cannot access the rest of your database and view restricted files. They receive a link to the VDR, and even if that link is forwarded, no one else at their organization can log into the virtual data room. This means that virtual data rooms prevent data spills in a variety of situations. These include sending sensitive company documents to the wrong person, someone authorized to receive the files sending them to someone not cleared, or a contractor logging into the system and opening files they should not see.

What happens if someone prints out a document from the virtual data room? The VDR embeds a watermark on the document when it is downloaded and printed. This will limit unauthorized use of printed documents and give you a way to track unauthorized replication of the files back to the source.

Document Control and Protection

Virtual data rooms do more than just store your files and limit access to authorized parties. Quality data rooms also allow for version control combined with backups so that you can restore the last good version of a file if someone’s update of the document is corrupted or simply wrong. Reporting tools used by virtual data rooms allow you to check the performance of other contributors and ensure that all necessary forms are completed before moving on to the next step in your workflow.

Virtual data rooms allow you to transfer critical documents into a data room and give a specific client authority to make changes as necessary. However, they will not be able to make changes to the rough draft of the documents or alter the documents after they’ve been digitally signed off.

And your team saves time by receiving notifications, if desired, to inform them when documents are finalized and approved instead of logging in to check on the status of the documentation.


Virtual data rooms are hosted on servers with near perfect uptime and broad dedicated bandwidth. When you use a virtual data room service provider, you are essentially guaranteed access to your data at any time without any delays. If there are any problems, virtual data room companies have professional staff available 24/7 to solve any problems you may have. This is likely better performance than your own company’s IT department could provide, and you’ve eliminated the risk of losing access to key documents due to a power outage or natural disaster at your own worksite.


Virtual data rooms enjoy the same price advantage virtual web hosting service has, since the cost of their hardware, software and IT staff are shared by many different clients. It is cheaper to rely on a virtual data room for critical document storage and distribution than your own IT department in most cases.

Virtual data rooms offer greater data security than many small and mid-sized businesses can provide and implement a number of features to prevent data leaks. You can share documents digitally through the virtual data room while limiting viewing and editing to only a select few.

Scroll to Top