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What is a Virtual Data Room

by DCirrus

Posted On 19 FEB 2019
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What is a Virtual Data Room?

 

In this era of advancing technologies, the sheer amount of data required to survive the competitive market and situations is overwhelmingly demanding. Fortunately, owing to the recent advancements in cloud services, data storage has become extremely convenient via an implementation of the same cloud technologies which is widely referred to as Virtual Data Room. For those who are curious to know more about the uses and advantages of a Virtual Data Room, the following will aid you to answer all your eager questions.

 

Virtual Data Room: A Definition

 

From a technical perspective, a Virtual Data Room is defined as a virtual space created in a cloud server that is used to manage and store crucial documents. It is referred to as a "virtual" space mainly because there is no physical place allotted for storing the data. All the data within a Virtual Data Room is stored in a digital form and can be easily accessed from the client by authorized personnel.

 

Where is a Virtual Data Room used?

 

Previously, a Virtual Data Room was used by lawyers to schedule meetings with their clients. As the industry realized the potential of a Virtual Data Room and its efficiency in storing confidential data and documents, its user base grew vastly. In the present day and age, a Virtual Data Room is used for data storage when there is a need to manage crucial documents and data securely. Today, it is mainly used by businesses for storing critical documents related to a merger or an acquisition deal with another business. However, a Virtual Data Room can mainly be used to store any digital data regardless of how crucial or insignificant it might be.

 

What are the advantages?

 

A Virtual Data Room comes with various advantages when compared to a physical data room. Each of the same is detailed in the following:-

 

  • Easy Access - Data within a Virtual Data Room can be accessed from anywhere and at any time. Much like a physical key, accessing a virtual data room requires authorized credentials that are supplied by the vendor to the appropriate individuals.
  • Easier Management - Physical Data Rooms are infamous for being difficult to manage since the data within the same requires to be managed through human intervention. Compared to the same, Virtual Data Rooms are managed by precise algorithms and accompanying programs which are specifically designed with management in mind.
  • Reduced Risk of Error - Since Physical Data Rooms are mostly managed by humans, there is a high chance of error or mismanagement seeping in the organization. Even the most insignificant of errors can have a lasting and severe impact when it comes to storing crucial documents. Virtual Data Rooms are managed by programs which have an almost negligible error rate. This ensures that the data within a virtual data room is always well-organized
  • Cost-Effective - Physical Data Rooms require physical space and relevant storage cabinets to store the specified data. This, even without adding the cost of management, is more expensive than having a Virtual Data Room. Therefore, Virtual Data Rooms are not only a more effective alternative for data storage but are also a more cost-effective one.