Before we know who uses virtual data rooms, we must first know what they are and what they are used for. A virtual data room is a database online that companies use to save confidential information. With so many documents and sensitive information being produced in a day, it is impossible for a company to store all these physically. The types of documents that are usually stored in these virtual data rooms are used for financial, tax matters, and legal information. Instead of using the internet where anybody in the world can have access to these important documents; they use the extra-net. Only authorized users with passwords can have access to the information stored in a virtual data room.
Who uses these virtual data rooms are in fact substantial financial and legal firms who have a lot of intangible assets that need to be stored securely. M&A (Mergers and Acquisitions) are the most common cases for using virtual data rooms. Imagine if Coca-Cola and Pepsi decided to merge into one singular soft drink company. It would be impossible because of the Sherman Anti-trust act, but just the thought of all the paperwork involved in that is staggering. That’s where virtual data rooms that store all the financial information come into play. It would take information from Coca-cola and Pepsi’s financial documents and merge them together. It is still not an easy process, but it is more efficient than using thousands of physical papers to do this.
Another usage of the virtual data rooms is one you would least expect which is the science industry. At first you wouldn’t think so, but actually virtual data rooms also play a big role in helping this particular industry. The science industry that uses this technology is pharmaceutical, biotech and medical. Like the finance and legal industry they too have a large amount of intellectual property that needs to be stored. What science companies like these have in their virtual data rooms comprises of is having licensing IP, clinical trials, strategic plans and also Mergers & Acquisitions.
The last one of many to use virtual data rooms are legal firms. Legal firms have confidential information that they must have secured for their staff, clients and other parties. Law firms have to keep their client’s information completely confidential under the Attorney-Client Privilege. Having physical documents with case information stored somewhere can be exposed to the wrong the people. But because of the extra-net needing passwords to access certain information, it will keep these documents safe. This is a critical reason for law firms to take action by using a virtual data room. Like the Science and business industry, the legal firm may have similar documents in their virtual data rooms. Some of the information you would see in one are strategic plans, litigation, fundraising and also M&A.
These are few of just the many industries that use the virtual data room technology. With this it is possible shortly we will become a paperless society. It has been in use for 15 years and already worth close to 1 billion dollars. American and European businesses are the biggest users of this technology. It won’t be long before other countries make this technology world wide.