Before the internet and cloud technologies remodeled data management practices, businesses used to spend huge amounts on paper, printing, couriers, and other supplies related to paper documentation. It was not only expensive but highly inefficient as well. For example, paper management was time-consuming, and companies had to hire additional human resources to manage such a complex system.
That changed with the advent of the internet and cloud technologies like virtual data rooms. Now, it hardly takes a few seconds to send a file from one part of the world to another. One of the most valuable things about data room software is the amount of security it gives to corporate documents.
Virtual data room market
Online data room software has already made an undeniable impact on global business sectors. The global VDR market was valued at $1948 million in 2022 alone. However, according to the projections, the market is expected to grow at a CAGR of 15% and hit the $4 billion figure by 2027.
North America stood as the biggest consumer of virtual data room technology, while Europe stood second. What’s more promising is that the corporate sector in Asia and the Gulf is also switching to the data room technology.
What is a virtual data room?
A virtual data room, commonly known as VDR or electronic data room, is a cloud-based digital document repository for corporate data management. It is an all-in-one platform that allows all types of businesses and professionals to store, access, share, and organize their documents or files. Data rooms provide tools to open and edit documents, play audio and video files, and run PPT presentations.
Unlike many other traditional and cloud data storage platforms, online data room software provides almost all modern-day communication tools. You can use VDR technology for organizing online business meetings from start to end. The Q&A modules are useful in dealmaking, while chat messenger allows one-to-one and group communication.
The biggest percentage of virtual data room consumption comes in the form of dealmaking. VDRs were originally used for mergers and acquisitions. Later they became an integral part of capital raising, fundraising, joint ventures, partnerships, corporate consolidations, asset trading and portfolio management, and real estate transactions.
Read more about virtual data rooms and their usage here: https://datarooms-review.com/virtual-data-room/.
Why is virtual data room the future of data storage?
Data room software has not only replaced the traditional paper management system, but the AI used in data rooms has also made data organization and management a lot easier. Here are some major reasons why VDRs are the future of data management.
1. Remote accessibility
Hybrid work cultures have become a new norm in the modern-day corporate world. Remote working was originally a camouflage during Covid-19, but businesses have realized its benefits in the long term. For example, Google has already introduced a hybrid-work culture in which employees can work from home and come to their respective offices as well.
An electronic data room is remotely accessible. You can easily upload, download, edit, print, alter, and share documents from your home or any part of the world. In simple words, you can access your virtual workspace from anywhere. The mobile apps from virtual data room providers make it easier to access your data rooms from your tablets and mobile phones.
2. Impeccable security
Digitalization is a blessing and a curse at the same time. While it made things easier and faster, it also created room for cyber crimes. Millions of records are compromised every year, costing companies millions and billions of dollars.
Online data room software is primarily famous for its hard-to-beat cyber security system. All high-end data room services use the latest security features like two-factor authorization, user permissions, document access control, dynamic watermarks, remote device purging, document shredding, fence view, and document access revocation.
It is important to note that virtual data room providers are mostly ISO, HIPAA, GDPR, FINRA, and SSAE-certified.
3. Better data organization
Virtual data room software, often backed by AI, allows you to organize data with ease. You can create as many folders and subfolders as you want. Many VDRs have an auto-indexing feature that automatically allocates an index number to every document uploaded in the VDR, making the retrieval process easy.
Modern-day vendors provide a due diligence checklist that not only allows companies to categorize documents easily but it also helps to perform due diligence with ease.
Preservation and optimal use of financial resources have become mandatory cost-cutting practices. VDRs help companies reduce their administrative expenses. These paperless solutions minimize:
- Paper costs
- Printing costs
- Courier expenses
- Meeting expenses
The above-mentioned costs are not minor by any means. An average company in the USA spends $400,000 on paper and printing every year. That said, a virtual data room helps cut these costs down significantly.
The virtual data room market has almost touched the $2 billion figure and is projected to grow at a CAGR of 15%. The VDR tech is becoming a mandatory corporate asset due to its imperial security, remote accessibility, and cost-effectiveness.