Business data privacy is a concern of grave importance for any firm or organization in the modern-day business world. If a business loses its confidential data to external parties, it loses credibility and faces legal liabilities. What’s more concerning is that data thefts and cyberattacks are getting worse with time. For example, over 16 billion records were exposed in June 2025.
So it is needless to say that businesses need a strong and safe data storage and management platform, especially when sharing data with external parties. This is where data rooms play a key role in securing critical business information.
Virtual data room software has emerged as one of the best options for businesses to store, share, and maintain their business data with utmost security. But there is more to it; not all virtual data room services are the same. The versatility of features and the standards of security vary from vendor to vendor. So, how to choose the right virtual data room for your needs?
We’ll start by explaining what a virtual data room is, then cover some basic yet highly useful factors to consider before choosing one for your business.
What is a virtual data room?
A virtual data room is a cloud-based platform that allows you to store and share data with maximum security. An online data room makes things easier for businesses to share data internally (employees, teams, directors, investors, stakeholders, etc.) and externally (clients, auditors, buyers) in a secure manner.
Virtual data room software is very commonly used by law firms, private equity firms, ICT firms, financial and investment banks, and the healthcare sector.
How to choose the right virtual data room services?
Before you start approaching virtual data room providers, it is essential to identify why you need a data room for your business? That is, how can an online data room help your business? Does your business need it just for storing or sharing business documents? What other features do you want in your virtual data room software?
Here is what you should look for when choosing data room services.
1. Document access control
Every virtual data room provider doesn't offer the same level of control over data access. Virtual data rooms are supposed to give you control over who can and cannot access a specific file(s) according to their responsibilities. Therefore, always make sure that the service provider you are targeting offers features like granular access permissions and view-only mode for documents.
2. Customization
The level of customization varies among different virtual data room providers. For example, if you want extensive document type approvals or advanced user management features, make sure your VDR provider is offering those features. If branding is important for your business, look for a provider that allows you to add your custom logo and other branding elements.
3. Dynamic watermarking
Dynamic watermarking is another amazing and highly sought-after feature in virtual data rooms. Dynamic watermarking is basically a customized/individualized identifier that makes it impossible to change or alter a document/file without any traces. That means it is easy to trace the individual who edited or altered the files. Dynamic watermarks are useful when you intend to share data with external parties during M&As or similar deals.
4. Data security
Data security is the core reason why any business wants to use a virtual data room. Of course, data security and Cyber Security are integral element of any VDR software as it protects your business data from internal and external threats.
There are multiple data room features like AI redaction, self-destructing documents, and fence-view mode for external data sharing. If you do not want pricier features, at least make sure the data room you choose has data encryption and multi-authentication features. Some of the most secure virtual data room providers include Ideals, Datasite, and Ansarada.
5. Data room comparison
Comparing different virtual data room providers is a must-do thing. There are plenty of them in the market, but search for the best data room software based on customer reviews. Compare their features, pricing methods, customer support, etc.
Apart from that, ask industry experts around you. This will help you understand which VDR provider you can trust.
6. Cost
Various virtual data room providers offer different pricing models depending on storage needs, available features, number of users, number of documents, etc. Choose the one according to your needs.
For instance, per-page pricing is better for short-term use where you will be having to share fewer files. Opt for flat-monthly pricing models if you plan to use data room services in the long run.
7. Ask for a free trial
Testing a virtual data room software before buying will allow you to determine whether it suits your business or not. Most of the VDR providers offer free trials or demos, and make sure you use this option.
Final words
Selecting a virtual data room is a significant choice for every company. For this reason, it is vital to comprehend what your company requires and what virtual data room software would be ideal for those needs. The tips presented above will assist you in making the right choice.
