What is a Data Room?

A data room is a kind of virtual storage solution that offers secure storage for documents. It also comes with a range of additional features that help in the due diligence process. These features include annotation tools and granular permissions, as well as watermarking and activity tracking.

Data rooms are commonly used to provide security documents to clients (SOC 2 documents or compliance certifications) to help with due diligence. This is a great way to accelerate the process and decrease risk by sharing the information with third parties before the transaction is completed.

Traditionally, companies have used email to share SOC 2 documents and other documentation. This isn’t only inefficient, but also leads to problems with the control of version. It’s also unsecure, with cyber-attacks http://www.datazoning.net/how-to-install-avast-driver-updater-on-your-os increasing, resulting in compromised inboxes, stolen credentials, and the phishing exploits.

Many secure storage and file sharing solutions such as Box or Dropbox allow access to documents on any device and in any location. They offer a high degree of security, but most people and businesses require more. Documents that are sensitive and used to raise funds, due diligence or negotiating agreements must be stored in software that has more protection.

The most important question you should ask any’secure data room’ is: does it stop authorized users from sharing documents with non-authorized users? Unfortunately, the answer is typically “no”. Most’secure data rooms’ do not restrict the number of times the same user credentials may be used to log into the system. It is easy for users to reuse logins from their own devices, or copy and paste the URL into the browser of a friend’s computer.