A data room is a storage option for electronic files that lets documents be stored in a safe environment. It also offers a number of features to aid with the due diligence. These features include annotation tools with granular permissions and access, watermarking and activity tracking.
A typical use of a data room is to share security documents (SOC 2 documents and compliance certificates, etc.) with clients to aid in the due diligence process. Sharing this information with other parties before the deal closes is a great way to speed up the due diligence process and lower the risk.
Traditionally, companies have used email to share SOC 2 docs and other documentation. While this is effective, it is inefficient and causes issues with version control. It is also insecure with email attacks increasing, which can lead to compromised inboxes and credentials being stolen, as well as phishing exploits.
Many secure file-sharing and storage services like Box or Dropbox offer document availability on any device and at any location. While they provide a good degree of security, the majority of companies or individuals need more than this. Documents that are sensitive and used to raise funds due diligence, negotiating agreements must be stored in software that http://www.datazoning.net/how-to-choose-data-room-software-for-ma-risk-management has higher levels of protection.
The most important thing to ask about any «secure data room» is whether it prohibits authorized users from sharing files with non-authorized users. Unfortunately, the answer is almost always no. The majority of «secure data rooms» don’t even limit how many times the same user’s credentials can be used to access the system. Users are able to reuse logins on their personal devices, or copy and paste links into the browser of a friend’s computer.