datazoning.net/a-comprehensive-data-room-software
A data room is a storage option for electronic files that allows documents to be stored in a secure environment. It also provides a number of additional features that help with the due diligence process. These features include annotations tools as well as granular access permissions activity tracking, and watermarking.
Data rooms are commonly used to provide security documents to clients (SOC 2 docs or compliance certifications) to aid due diligence. This is a great method to accelerate the process and reduce risk by sharing this information with other parties before the deal is complete.
Traditionally, companies have utilized email to share SOC 2 documents and other documents. This isn’t only inefficient, but also creates problems with version control. It is also insecure with cyber-attacks on the rise resulting in compromised inboxes and credentials being stolen, as well as the phishing exploits.
Many secure storage and file sharing solutions like Box or Dropbox provide access to documents on any device and in any location. While they provide a good level of security most users or businesses need more than this. Important documents used to conduct due diligence negotiation, fundraising or even negotiating deals should be saved and shared with software that has greater levels of security over these personal file sharing systems.
The most important question to inquire about a “secure data room” is whether it blocks authorized users from sharing files with non-authorized individuals. Unfortunately the answer to this is almost always not. Most secure data rooms don’t even limit how many times the same user’s credentials can be used to access the system. It’s easy for users to re-use logins they have created on their personal devices or copy and paste the link into the browser of a colleague’s computer.