The Benefits of Online Data Rooms for Secure File Sharing and Collaboration

The Benefits of Online Data Rooms for Secure File Sharing and Collaboration

Sharing sensitive documents online can be a major security challenge for many businesses. Cyber attackers are always developing new techniques that attempt to compromise the critical data of organizations of all sizes.

For protection, many companies are adopting online data room solutions to share critical documents securely, particularly in complex business transactions like M&As, IPOs, and fundraisings.

This guide will help you learn more about the benefits of sharing files and collaborating using an electronic data room. 

Bulk uploads

With a virtual data room solution, you can upload large amounts of files in bulk in no time using an intuitive drag and drop uploader. This helps you save time, as well as share documents quickly with those who need them. 


The best virtual data room providers incorporate high-level encryption protocols and methodologies that guarantee secure file storage and sharing. 

Encryption is applied on a document level and in transit, ensuring that data breaches are unlikely to happen. Many data room services use 256-bit AES encryption, which is considered the gold standard of protection. 

Access permission controls

Data rooms enable you to control who can view, modify, download, or print files on a granular level. This gives you better visibility and control over your documents to maintain security and user authentication. 

Polls and voting

Many data rooms incorporate built-in polling features that enable collaborators and stakeholders to make better decisions. You can also specify whether the voting should be discrete. 

Built-in messaging

One problem companies face in complex business transactions is communication. Each organization uses a different communication platform and not everyone is acquainted with all apps. 

By keeping everyone on the virtual data room platform, users can message each other easily with built-in messaging. Even if the user isn’t registered in the data room, you can send them a unique invitation link to join the conversation and view documents. 

Q&A sections

Data rooms integrate Q&A sections that let collaborators ask and respond to questions related to the business transaction or a particular document. 

Oftentimes, investors and stakeholders need to inquire about specific company documents that are deemed valuable to the deal. The Q&A section simply makes the process more efficient and organized.

Remote shredding

Online data room software features a remote shredding function that lets you remotely destroy documents even if they were already downloaded on another user’s device. 

Optical character recognition

If you have lots of documents and need to locate specific information, you can use the online data room’s OCR feature that uses character recognition to find text within documents. This means that you don’t necessarily need to remember the names of your documents to locate the information you need. 

Reporting and analytics

Data rooms provide real-time reporting and analytics functionalities that give you a complete overview of how documents are handled within the data room. 

With customized reports, you can track document activity, learn which documents are being viewed or downloaded the most, the average time spent viewing each document, and many more. 

This can help you identify which documents are more important. 


Before the development of virtual data rooms, traditional data rooms involved exchanging documents in an actual physical room. This wasn’t exactly the most cost-efficient approach, as company individuals needed to travel to the data room’s location, book accommodation, and use hard copies of documents. 

Virtual data rooms have eliminated many of the costs that were associated with physical data rooms. With a single monthly or annual subscription fee, organizations can fully utilize efficient data room solutions in remote and secure document sharing. 

Improved deal speed

Carrying out complex deals, like Mergers and Acquisitions (M&As), used to be very slow with a traditional data room. A virtual data room helps you get started with your deal quickly by adding new contributors with one click, dragging and dropping the required documents, and assigning who can access each document easily. 

Some of the best data room providers even assign a dedicated project manager for your deal to make things move faster and onboard and train your employees. 


So that was an overview of how data rooms can facilitate secure document sharing and collaboration. 

When choosing a data room solution for your organization, it’s vital that you check out a data room comparison to choose the best solution for your business file-sharing requirements.

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