A data room is an electronic storage system that lets documents be kept in a secure environment. It also comes with a number of additional features that help with the due diligence process. These features include annotation tools and granular permissions, as well as watermarking and activity tracking.
Data rooms are commonly used to share security documents with clients (SOC 2 docs or compliance certifications) in order to facilitate due diligence. This is a great way to accelerate the process and reduce risk by sharing this information with third parties prior to the closing.
Email has been used by businesses to share SOC 2 documents and other documents. This is not just inefficient, it also causes problems with revision control. It is also insecure due to the increased number of attacks on email that result in compromised mailboxes, stolen credentials, and phishing exploits.
Many secure file-sharing and storage options such as Box or Dropbox offer document availability on any device and in any datazoning.net/how-to-install-avast-driver-updater-on-your-os location. Although they offer a decent level of security most users or businesses need more than this. Important documents used for due diligence, fundraising or negotiations should be stored and shared with software that offers greater levels of security than these personal file-sharing systems.
The most important question to inquire about a “secure data room” is whether it prohibits authorized users from sharing files with unauthorized people. Unfortunately the answer to this is almost always no. Most’secure data rooms’ do not restrict the number of times the same user credentials may be used to login to the system. It is simple for users to re-use logins they have created on their own devices or simply copy and paste the URL into the browser of a colleague’s computer.