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Cloud Storage vs Virtual Data Rooms: A Brief Guide

Kison Patel
CEO and Founder of DealRoom
Kison Patel

Kison Patel is the Founder and CEO of DealRoom, a Chicago-based diligence management software that uses Agile principles to innovate and modernize the finance industry. As a former M&A advisor with over a decade of experience, Kison developed DealRoom after seeing first hand a number of deep-seated, industry-wide structural issues and inefficiencies.

CEO and Founder of DealRoom

VDRs (Virtual Data Rooms) and cloud storage may seem similar, but they are not. 

So suppose you are a Mac user and have already leveraged the benefits of CleanMyMac X but want additional security for your data, you must make the choice of selecting VDRs or cloud storage options with a grain of salt.

The same goes for Windows users. 

Here’s a lowdown of VDRs and cloud storage to help you make an informed decision. 

What is a Virtual Data Room (VDR)?

VDR is a file-sharing platform where confidential data is stored and shared with trusted third parties. The platform ensures the highest possible security of the data and offers several features to streamline file tracking and project management. 

Common uses of VDR include due diligence, fundraising, IPO, and mergers & acquisitions. 

Besides storing confidential data, a VDR offers additional tools and services for tracking and user management, templates, data-gathering instruments, and checklists. 

firmroom

What is Cloud Storage?

Cloud storage solution is a cloud-computing model allowing users to store data on the Internet through third parties that operate data storage. It is also the technology behind most VDRs and free file-sharing platforms. 

Cloud storage solutions offer scalability, agility, and durability. Users can access their data anytime, anywhere, with a stable Internet connection. 

However, the clouds are not wholly virtual. The file-sharing platform hosts servers containing the user data and software. The primary difference from on-premise storage is the servers are remote. 

The use of cloud storage services is many, including industrial and domestic. However, it might not be the right solution for everyone. 

A Brief Overview of VDR vs Cloud Storage

1. Security

With a cloud storage solution, you will be entrusting your data to a third party. Therefore, it depends on the cloud provider to ensure its security certifications are updated. Also, if the cloud resides in several data centers in various locations, each must have high-end cybersecurity measures. 

With the proper credentials, anyone can access cloud data from anywhere. Although this is convenient, it opens several access points, and all of them must be protected to ensure the data transmitted through them is protected. 

A VDR is physically connected to the organization’s local network. Therefore, it is easier to ensure that only those with company-approved devices and credentials can access information and stored applications. The responsibility for security lies with the users. 

2. Scalability & personalization

VDRs are the ideal solution for organizations requiring a dedicated system granting them complete control over their hardware and data. So it is suited for companies running several application types and complicated workloads.

But it has a limited capacity. Users are responsible for installing and purchasing additional equipment and upgrading to the latest technology if the data center’s storage needs to be expanded. 

A cloud storage option, on the other hand, has potentially unlimited capacity, which depends on the provider’s service plans and offerings.

The drawback is that you will have less control over the hardware located remotely because the vendor manages and owns the data center systems.

Moreover, your organization will share hardware resources with other cloud users unless you pay for a private cloud within the cloud provider’s network. 

3. Functional differences

On paper, VDRs and cloud storage solutions appear similar, but they differ in functionality. 

The primary features of cloud storage solutions are:

  • Fuss-free, quick setup
  • Accessible and expandable storage options 
  • Quick sharing of data 
  • Seamless integration with other platforms 

But cloud storage solutions are not flawless and have some drawbacks related to data security. This is because it is challenging to control and track data sharing. Also, cloud vendors offer limited customer support or tools to deal with issues. 

As with Virtual Data Rooms, there are more opportunities to share information safely and use different features to follow progress, manage permissions, and more. Using a VDR, you will get the following:

  • Around-the-clock customer support 
  • Management and tracking tools 
  • Different permission levels to safeguard your data 
  • High-end security adhering to the highest international security certifications and standards
  • The best solution for businesses handling complex projects 

4. Pricing 

Virtual data rooms pricing and cloud storage solutions pricing is significantly different. 

For VDRs, there are different subscription options and pricing plans. So companies can select the one that best suits their needs. 

On the other hand, the cost structures for cloud storage solutions vary. They might be a free service with paid add-ons, a monthly fee, or a one-time fee with an extra charge for add-ons.

Most cloud vendors offer freemium plans, which include limited storage free of charge, and when users want more space, they have to upgrade to a monthly subscription plan. 

You will not get free plans with data rooms as with cloud storage solutions. Most VDRs are expensive because they offer 24/7 support and top-notch security measures and regularly introduce new features. 

Conclusion

VDRs and cloud storage options are excellent solutions for storing and sharing confidential data. Assess your specific needs to decide which solution suits you best.

virtual data room

VDRs (Virtual Data Rooms) and cloud storage may seem similar, but they are not. 

So suppose you are a Mac user and have already leveraged the benefits of CleanMyMac X but want additional security for your data, you must make the choice of selecting VDRs or cloud storage options with a grain of salt.

The same goes for Windows users. 

Here’s a lowdown of VDRs and cloud storage to help you make an informed decision. 

What is a Virtual Data Room (VDR)?

VDR is a file-sharing platform where confidential data is stored and shared with trusted third parties. The platform ensures the highest possible security of the data and offers several features to streamline file tracking and project management. 

Common uses of VDR include due diligence, fundraising, IPO, and mergers & acquisitions. 

Besides storing confidential data, a VDR offers additional tools and services for tracking and user management, templates, data-gathering instruments, and checklists. 

firmroom

What is Cloud Storage?

Cloud storage solution is a cloud-computing model allowing users to store data on the Internet through third parties that operate data storage. It is also the technology behind most VDRs and free file-sharing platforms. 

Cloud storage solutions offer scalability, agility, and durability. Users can access their data anytime, anywhere, with a stable Internet connection. 

However, the clouds are not wholly virtual. The file-sharing platform hosts servers containing the user data and software. The primary difference from on-premise storage is the servers are remote. 

The use of cloud storage services is many, including industrial and domestic. However, it might not be the right solution for everyone. 

A Brief Overview of VDR vs Cloud Storage

1. Security

With a cloud storage solution, you will be entrusting your data to a third party. Therefore, it depends on the cloud provider to ensure its security certifications are updated. Also, if the cloud resides in several data centers in various locations, each must have high-end cybersecurity measures. 

With the proper credentials, anyone can access cloud data from anywhere. Although this is convenient, it opens several access points, and all of them must be protected to ensure the data transmitted through them is protected. 

A VDR is physically connected to the organization’s local network. Therefore, it is easier to ensure that only those with company-approved devices and credentials can access information and stored applications. The responsibility for security lies with the users. 

2. Scalability & personalization

VDRs are the ideal solution for organizations requiring a dedicated system granting them complete control over their hardware and data. So it is suited for companies running several application types and complicated workloads.

But it has a limited capacity. Users are responsible for installing and purchasing additional equipment and upgrading to the latest technology if the data center’s storage needs to be expanded. 

A cloud storage option, on the other hand, has potentially unlimited capacity, which depends on the provider’s service plans and offerings.

The drawback is that you will have less control over the hardware located remotely because the vendor manages and owns the data center systems.

Moreover, your organization will share hardware resources with other cloud users unless you pay for a private cloud within the cloud provider’s network. 

3. Functional differences

On paper, VDRs and cloud storage solutions appear similar, but they differ in functionality. 

The primary features of cloud storage solutions are:

  • Fuss-free, quick setup
  • Accessible and expandable storage options 
  • Quick sharing of data 
  • Seamless integration with other platforms 

But cloud storage solutions are not flawless and have some drawbacks related to data security. This is because it is challenging to control and track data sharing. Also, cloud vendors offer limited customer support or tools to deal with issues. 

As with Virtual Data Rooms, there are more opportunities to share information safely and use different features to follow progress, manage permissions, and more. Using a VDR, you will get the following:

  • Around-the-clock customer support 
  • Management and tracking tools 
  • Different permission levels to safeguard your data 
  • High-end security adhering to the highest international security certifications and standards
  • The best solution for businesses handling complex projects 

4. Pricing 

Virtual data rooms pricing and cloud storage solutions pricing is significantly different. 

For VDRs, there are different subscription options and pricing plans. So companies can select the one that best suits their needs. 

On the other hand, the cost structures for cloud storage solutions vary. They might be a free service with paid add-ons, a monthly fee, or a one-time fee with an extra charge for add-ons.

Most cloud vendors offer freemium plans, which include limited storage free of charge, and when users want more space, they have to upgrade to a monthly subscription plan. 

You will not get free plans with data rooms as with cloud storage solutions. Most VDRs are expensive because they offer 24/7 support and top-notch security measures and regularly introduce new features. 

Conclusion

VDRs and cloud storage options are excellent solutions for storing and sharing confidential data. Assess your specific needs to decide which solution suits you best.

virtual data room

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