What are Virtual Data Rooms (VDRs) and how can they help companies to manage sensitive data?

February 10 , 2023

Virtual Data Rooms (VDRs) are secure and protected digital working environments, mainly used to exchange sensitive data and documents during due diligence activities, mergers and acquisitions, financing and other business transactions. They are also an excellent solution for any company that needs to exchange confidential documents with employees, collaborators or customers.

In this article we will thoroughly explain how VDRs work and the most effective solutions based on the needs of small, medium or large companies.

What are Virtual Data Rooms and how are they created?

Virtual Data Rooms are the digital evolution (indeed, virtual) of physical Data Rooms. A DR is a real room that is constantly monitored and supervised, which is mainly used in due diligence activities, for example for the exchange of confidential information between sellers and hypothetical buyers for the sale or transfer of a company or a specific branch. Following the digitisation of business processes, these sensitive operations are now carried out virtually as well. Hence the need to create VDRs – Virtual Data Rooms: protected virtual environments that guarantee security and confidentiality.

VDRs are much simpler and more convenient than their physical equivalent and can be used not only to carry out due diligence but in all cases where the confidentiality and secrecy of information and data shared between companies or work groups must be maintained. For example, a Virtual Data Room is ideal for managing external collaborations on projects where patents and intellectual property must be protected.

This is why Virtual Data Rooms are used in many sectors, from financial to pharmaceutical, from legal to the energy sector. They are particularly useful in situations where sensitive documents must be shared with a large number of people, i.e., for lawyers and investors, but also for companies that work with many customers and suppliers.

How do VDRs work?

VDRs are cloud environments to be precise, accessible from any device but only by authorised users. They generally have encryption systems that allow documents to be shared securely, avoiding the risk of data loss or security breaches. In addition, VDRs often include a number of advanced document management features, such as the ability to:

track changes to files;
keep track of downloads and any other actions carried out within the virtual room;
track the time spent by each user within the VDR;
set granular access permissions.

VDRs give administrators almost total control, and in the event of abnormal behaviour allow them to revoke privileges immediately and avoid data leaks or losses.

Moreover, VDRs can help companies to meet regulatory compliance requirements, such as the GDPR, which set strict standards for data protection.

Which VDR solutions are best?

More or less complex VDR solutions can be chosen depending on your specific needs.

Boolebox’s solutions for corporate data protection include Secure File Manager, a data sharing application accessible from any device. It leverages Boolebox’s military-grade encryption and allows you to safely and securely upload, organise, edit and share documents. It is definitely the best solution for medium and large companies, which need an ad hoc platform with a lot of scope for action in terms of activity classification and control.

Smaller companies that already use other external tools for data sharing (such as OneDrive, Windows Network Folders, SharePoint and others) would instead benefit from the encryption solutions we’ve developed to make these tools secure, allowing you to use them to manage sensitive and confidential information as well:

In conclusion, in order to choose the Virtual Data Room that’s best suited to your company’s needs, it’s important to evaluate:

the degree of granularity and differentiation required in granting access/permission;
ease of use with respect to the computer skills of its future users;
the ability to manage files of different formats/sizes according to specific needs (a lawyer will likely need to share mostly written documents, while an architect or a doctor may need to share high-definition images, videos and other specific files).

If you’d like more information, don’t hesitate to contact us! Our experts are on hand to help you choose the VDR solution best suited to your needs!