Virtual computer rooms are now a matter of course as part of due diligence and have already significantly optimized the process of corporate transactions. All relevant sales documents can be viewed and checked securely using a virtual computer room, regardless of location. A virtual data room provides maximum protection when accessing confidential data through data encryption during transmission and storage. In addition, particularly sensitive documents can be protected against downloading and protected with a watermark. Detailed access rights in the data room regulate which users can only read, download or edit data. Extensive analysis and control options are invaluable for the salesperson so that the virtual data room has quickly established itself in the M&A area and become indispensable in daily practice.
The functionality of virtual data rooms from established providers usually leaves nothing to be desired on the seller and bidder sides. It is therefore not surprising that quick and easy user-friendliness is now increasingly in focus when choosing a virtual data solution. After all, the virtual computer room is primarily intended to increase the efficiency of completing transactions – and the less training and setup time required for the computer room, the more time is available to those involved in a transaction for optimal preparation, analysis and negotiation.
Demand Is Increasing
Given the persistent economic effects of the Corona crisis, it is feared that more and more companies will slip into the red and face the threat of a hasty sale or bankruptcy. As a result of the pandemic, experts expect a significant increase in distressed M&A transactions in the near future – especially among smaller companies. In recent months, the demand for data rooms from smaller companies, which are primarily looking for a fast and very user-friendly data solution for conducting due diligence, has increased. A large number of these companies carry out due diligence for the first time and cannot afford top consultants in the sales or financing process. The number of sales-relevant documents is often relatively small and even a Q&A functionality in the computer room is not necessary. For these use cases, complex functionality will be counterproductive. For most users on the seller and provider side, ease of use for the computer room is much more important than comprehensive functionality.
More than just due diligence
For several years, the trend has been observed that virtual data rooms arouse great interest beyond the topic of due diligence and that companies, law firms and management consultants also use virtual data rooms for secure, cross-location and cross-company data exchange outside. of mergers, acquisitions and real estate transactions also use online collaboration; be it with customers, business partners or in project teams. Previous solutions, such as email, FTP servers or complex software applications such as SharePoint or cloud storage services, are either too insecure or overwhelm users and require significant IT management efforts. At the same time, compliance requirements in companies increase with regard to data security – also when data is exchanged across company boundaries. With integrated Managed File Transfer functionality, virtual data rooms, such as those from netfiles, also offer the ability to send files securely to external parties outside the data room. In this way, confidential files can be made available to business partners or customers via a download link without the need for a user account in the data room. It is also optionally possible to receive data from external users. In addition to the sophisticated security features, virtual computer rooms are often characterized by being particularly easy to set up. There are now computer rooms that can be used immediately via a web browser without installing software or plugins – also for setting up computer room administrators. It is usually no longer necessary to involve the IT department when setting up and using a virtual computer room.
Different Uses of Virtual Computer Rooms
And so the use of a virtual computer room is not only common in due diligence today, but in a variety of applications – be it for secure data exchange across companies, in project work across locations, in property management, in committee communication or working from home. Some data room providers, such as netfiles GmbH, now offer a video conferencing feature directly in the virtual data room, so that secure and data protection compatible online meetings with other users can be held directly in the data room without additional software or plugins. The same strict security rules and data protection regulations apply to the video conferencing function as to netfiles’ virtual data rooms.