Today’s economic realities and a highly competitive environment are forcing companies to look for new opportunities for growth. In this regard, the importance of mergers and acquisitions increases as an essential development factor, provided with external resources. However, despite the important part of such deals, there is always a risk of exposing the trade secrets of the organization. That on the contrary can harm your business.
Many use Dropbox corporate storage or Google Docs and Google Drive as part of G Suite services to share data. For non-critical documents, this option is good, but it is not suitable for transferring sensitive information to the side. Therefore, we propose to use virtual data rooms. They are deployed in the customer’s IT infrastructure (on-premises) and is fully controlled by him or launched in a private cloud (hosted), and then a provider specializing in the field of secure document exchange is responsible for it.
And in order to finally convince you of the usefulness of the data room services, we have prepared a short article. Below you will find information about how these rooms work, how reliable they are, and how and to whom they can be useful.
How Does the VDR Work?
Such online data room software is presented as storage hosted in a private cloud or within a secure perimeter of an organization. Its main task is to provide authorized users with access to documents through a web interface or special applications.
Such room is especially useful for:
- making large corporate dealings;
- providing access to the company’s reporting during the audit;
- transfer of information to investors;
- situations where you need to give business-critical data to the other side.
The traffic between the client and the data room software storage is mandatory encrypted, and in some cases, DRM functions can be implemented – a digital restrictions management system. Then the documents themselves are encrypted.
The user uploads files to the storage sets up access and sends a link to the recipient. The process can be automated since many developers implement integration with file managers, email programs, instant messengers, and other popular software in client applications. In this case, the process of downloading and sending looks a little more complicated than linking an attachment to an email.
Who Will Benefit from VDR Encryption?
Data room vendors indicate that the range of potential customers should not be limited to individual industries. First of all, virtual data rooms are useful for companies related to:
- financial sphere;
- construction and design organizations;
- law firms;
- telecom service providers and retailers.
All of them often work with critical information and need the means to securely send documents to external counterparties or to remote branches. Such customers require the ability to flexibly configure document access rights, manage their life cycle, and even protect them using DRM technologies. They can easily achieve this with the help of virtual data room providers.
How VDRs Protect Your Trade Secrets
There are five main factors proving the reliability of the data room services:
- The virtual data room provides an increased level of protection for documents placed in the storage, access to which can only be obtained after authentication (most often two-factor). At the same time, rights are configured much more flexibly than in public cloud services.
- VDR allows, for example, viewing a document (and in some cases, parts of it) in a browser, but prohibits downloading.
- VDR implements protection against ‘Man in the middle’ attacks, and access permission can be revoked or granted for a limited period of time.
- One of the key features of the virtual data room is the maintenance of a detailed event log. It allows you to understand in detail who, when, and from where accessed documents – such details are usually not stored in the logs of public services.
- The client electronic data room will by itself control the deletion of documents on the users’ side and block the download of files placed in the repository.
Mergers and acquisitions involve the transfer of ownership and change of control over the enterprise, but not the acquisition of trade secrets. Therefore, we recommend refusing to use public cloud services to save essential data. They do not support DRM technologies, and they also do not have advanced control over the rights to work with documents, especially on remote machines. At best, they allow you to set a ban on downloading and printing. But this is not enough to get one hundred percent safe during M&A.
On the other hand, you can choose data room providers. They will help you make deals without harming your organization. You can always set up access to valuable information, as well as find the source of a data leak by utilizing virtual data rooms.