What Is A Data Room Used For?

what is a data room used for

Over the last decade, many companies have resorted to using virtual data rooms to store and share classified information such as financial transactions and IPO data. These data rooms provide a variety of security features like multiple factor authentication and advanced permissions to maintain data integrity and due diligence.

Your business can earn remarkable benefits from engaging the services of a virtual data room. These rooms have become quite popular among SMEs and large corporates due to their superior data-handling features. Here are 7 uses of data rooms:

Storing Confidential Documents

Data rooms are used to store confidential documents. VDRs provide an assortment of security tools and features to guarantee top-level protection for all your company’s secrets. They are more secure than other cloud data storage solutions, making them ideal especially when dealing with sensitive company documents.

Sharing Information

Companies conducting mergers & acquisitions have to share a large number of documents with their new business associates. In such instances, data rooms can come in handy because of their advanced file sharing features. Documents can be uploaded to the data room and consequently downloaded or viewed by other users. People can also request for documents that can be shared via the data room.

Storing Financial Data

During private equity and venture capital transactions, shareholders often need to access the company’s confidential documents as part of due diligence. Documents that contain financial transactions can be safely stored and accessed in the data room.

Ease Of Access To Information

With all the numerous documents involved in corporate transactions (such as mergers and acquisitions), finding what you’re looking for could take a while. A data room can be organized in such a way that you can search for a specific document and find it in seconds. This way, access to crucial information is made faster and easier for everyone.

Limiting Access

Every company possesses some level of confidential information that should only be accessed by certain people. Data rooms are a great way to limit access to those documents because you are able to set permissions and only allow those with authorization to access files. You will also be able to track who has accessed a certain file and prevent any leakage of company secrets.

Uploading Large Amounts Of Data

Data rooms not only store confidential information but can also store large amounts of data. They have large storage capacities that allow companies to store thousands of documents. This way, companies save on space and money they would have spent printing physical copies.


Legal firms use data rooms to share confidential information with clients. In addition, data rooms are also used in court proceedings which allows litigators, attorneys and other interested parties to have access to confidential documents.

There are numerous advantages of owning a virtual data room. Every company that wants to invest in data due diligence should at least have a VDR. Data rooms can easily be customized based on the company’s needs. They are great for data security and file sharing.

With over 9 years of search marketing experience, Sandra is cross skilled between PPC and SEO. Her experience in search spans across different verticals including Technology, Retail, Travel & Automotive.