Virtual Data Rooms vs. File-Sharing Platforms

The everyday working process is becoming more and more data-intensive across all industries. To be able to work productively, a device-independent, fast, and intuitive data exchange solution are a must-have for every company. This article is a comparative review of two options – virtual data rooms vs. Đ°ile-sharing platforms.

How to organize file-sharing for business?

If you work in IT in a small or medium business, you understand the importance of simply sharing files, both large and small, with clients or other members of the organization. Today’s modern companies operate in many places around the world, mobile and without borders. To do this, you need the certainty that the business data and documents circulating between the locations via the Internet will not fall into the wrong hands. Besides, working outside the office has become a daily norm. The ability to work remotely requires a corporate tool that will allow you not to drop out of the workflow, regardless of place and time.

File-sharing and cloud storage are therefore being used more and more frequently. This gives users access to the latest versions of a document, allows them to be synchronized and securely exchange data – from any end device.

So, there is a need for a specially-designed software solution to solve all these problems. In this case, virtual data rooms or file-sharing platforms are the alternatives. But what will you choose for your corporate deal management?

Virtual Data Rooms vs. File Sharing Platforms: what is the difference?

Data rooms have established themselves in recent years, especially for due diligence reviews (M&A, financial, and real estate transactions), and against this background offer very extensive security and control functions. Why not Dropbox, Google Drive, or Microsoft OneDrive as cloud storage for companies?

When it comes to exchanging sensitive documents such as balance sheets, construction drawings, or contracts, a data room is the only secure solution. With conventional cloud storage, file-sharing, or file hosting services, confidential data is not adequately protected against industrial espionage or other misuses. Especially concerning their functionality and control options, conventional file-sharing services offer far less than a VDR.

The data room offers secure and traceable collaboration within the company and beyond its borders. With this software, the aspect of security always takes precedence over the possibility of sharing data as widely as possible – the latter usually has priority when using file-sharing services.

So, VDR provides the following security measures:

  • role-based, user-specific access rights to documents;
  • protect documents from printing and downloading;
  • the tracking of logins, read access, uploads, and downloads;
  • additional document protection via watermarks;
  • the ability to define password policies for users of the data room;
  • automatic document versioning;
  • and 256-bit strong encryption of the file storage.

A file hosting service requires only registration and compliance with the terms of use, in return providing content storage (for a certain period) and a link to files. In addition, file hosting services are limited in disk quota (usually up to 100 MB), and you will not be able to upload very large files there. This service should be recognized as the most convenient for situations in which a one-time placement of a large file with its subsequent deletion is required. Some services provide the service “delete immediately after download” or “delete after a user-defined time”, which is good from a security point of view. Such resources are not suitable for the long-term storage of files.

An additional protection method in this option can be archiving a file with a password, as well as encrypting it with one of the third-party programs.

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