What is a Secure Data Room?

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A secure dataroom is an online collaboration platform that speeds up due-diligence, shortens timelines for M&A and deal making, while offering complete security. It enables buy-side and sell-side teams to manage the full duration of a transaction from beginning to end with confidence.

What sets a secure data room in contrast to file sharing sites like Dropbox is that it’s generally more targeted towards enterprises with the possibility of grouping users, assign specific permissions, and gain insight into usage through analytics (e.g. when, how and from where data is accessed. Some have more sophisticated options, like the ability to block the downloading and copying of documents (a major no-no) or even showing documents on a screen that cannot be scanned. Many use industry-leading encryption to scramble sensitive data and multi-factor authentication to ensure that the person attempting to login is the one who is trying to gain access.

Most secure data rooms also permit document download for offline viewing in PDF form. If you allow users to print directly to physical printers, or save files to file driver to use for other reasons, they will lose the security applied to the original information stored in the virtual data rooms.

If you can extract these downloaded files from the data room or other systems, and then view them on computers without connecting to the Internet that defeats the entire purpose of having a secure data room for M&A due diligence as well as litigation, compliance, and other sensitive documents that need to be locked down to devices, and not sent to servers. This is why we recommend using a DRM based solution that locks files to devices and not to servers and makes it impossible to remove them from devices or share them with others.

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