Do you really need a virtual data room?
Virtual Data Rooms (VDRs) are the digital version of physical data rooms. Without VDRs, transactions, mergers and acquisitions, loan syndication, legal proceedings, international finance and all other processes that require due diligence cannot be digitized. In nutshell, a VDR is an online Fort Knox for documents. It is essentially a cloud-based system by a third party that provides secure and continuous document exchange for clients.
How do VDRs work?
Of course, security implies accountability. In tech speak, it means authentication, authorization and logging. Authentication is identity verification typically via username, password, and biometrics for the paranoid and the cutting edge. Authorization is how the system ensures users access only what they should. Logging is the recording of activity, allow for a postmortem or audit in case of a breach.
How the different providers compare
This comparison requires metrics, which require units. As such, in the preceding section, we have laid the ground work for virtual data room reviews by establishing the baseline. Authorization, authentication and logging features required by a due diligence process must be provided for an offering to be considered virtual data room. So, if you are out shopping for a virtual data room provider, here is how they rank:
Firmex is a market leader in data room spaces. The numbers, it is said, don’t lie. In the 12 months running up to October 2017, 10,000 new customers signed up for the company’s services. That brought the total number of customers to 80,000. However, a former US president is reported to have said there are lies, damn lies and then statistics, implying statistics can lie. But then when the likes of Deloitte, Barclays, Deutsche Bank, CIBC, Omers, and PWC are in the client list, you have to sit up and pay attention.
A breach of the due diligence process can easily break a company while security concerns can break a deal. So in VDR service provision, all-day everyday customer care is a must. Going through the customer care timelines of Firmex in the social media, the company’s rate of issue resolution is evidently outstanding. Particularly striking is the consistently low time taken to respond when an issue is raised and how quickly the term I can’t translates to Ooh, thanks.
Intralinks is an old player in the game and its numbers are way more impressive than those chalked up by Firmex. However, they become less impressive when you take into consideration the fact that they have been working the market since 1996. Intralinks has over 90K users signed up and a clientele that’s mostly comprised of large enterprises. If you factor in the fact that deals worth over $25 trillion have been finalized using this VDR provider, it becomes clear that Intralinks is a heavyweight.
In addition to VDR’s, Intralinks is a player in the provision of enterprise collaboration SaaS solutions. This is partly responsible for their market dominance in the large enterprise customer segment, who use the service for internal collaboration in far-flung divisions as well as VDR’s. But because of the company’s steep pricing and sluggish customer care, we consider Firmex a better offering.
If we had to name the top three VDR providers, MerrilDatasite would be the last entry. It targets the same market segment as Intralinks and is a worthy opponent. However, it’s pricing is even steeper. The company offers additional services such as consulting, financial services and content management. It also has a number of blue-chip clients.
4. RR Donnelley’s Venue
The last entry in our virtual data room reviews is one of the oldest enterprises worldwide. It started as a printing service in 1864 and has been in the document industry since then. It is also a pioneer in the VDR industry, a service it has been offering since 1990. It tends to offer a complete M&A solution, in which VDR is a valuable addition.
Virtual data rooms enable the completion of high value and sensitive online transactions on a national, regional and global scale. They are a natural progression of the physical data rooms hitherto required by due diligence processes. Among the virtual data room service providers we reviewed, Firmex was the best of the batch based on service delivery, pricing and support. Among the top four providers, however, pricing is the main difference.
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