Secure data rooms are an online collaboration software platform that helps streamline due diligence, shortening timelines in M&A and other deals while providing ironclad security. It allows buy-side and sell-side teams to oversee the complete cycle of transactions from start to finish with confidence.
What sets a secure data room distinct from file sharing websites like Dropbox is that it’s generally focused on the enterprise with the ability to group users, assign the permissions for them and gain insight into the use of your data through analytics (e.g. the time, date and location data is accessible. Many have additional features such as the ability to stop downloading and copying (a big no no) or even the ability to display documents on screens that cannot be screenshotted. Many of them have the industry’s top encryption technology to encrypt sensitive information and multi-factor authentication to make sure it’s the user attempting to log in and request access to the data.
Most secure datarooms permit users to download documents in PDF format for offline viewing. But, if users print these files onto physical printers or let them save them to file drivers for various reasons, they will lose the security that is given to the original data in the virtual data room.
If you are able to extract these downloaded files from the data room or other systems and view them on computers without being connected to the Internet this defeats the whole purpose of using a secure data room to store M&A due diligence as well as litigation, compliance, and other sensitive documents that need to be locked to devices and not transferred to servers. We recommend a DRM-based system which locks files onto devices rather than servers. This makes it impossible to delete the files from devices and share them.