What Is a Cloud Data Room?

A cloud data room is a cloud-based solution specifically designed to facilitate the storage and sharing of confidential business data in a secure and safe environment. They are used to aid due diligence during M&A transactions, IPOs, and legal proceedings, but they can be utilized in any situation that requires safe and efficient management of sensitive documentation.

As with any other cloud-based program such as a virtual data room, it is highly scalable and easy to access – all you require is an internet connection. Data stored in the cloud unlike traditional laptops, desktops and servers, are secured by multiple layers security. This includes encryption and firewalls as well as multiple backups in order to avoid any accidental data loss.

A virtual data room also includes a range of features which support the processes dealmakers manage. These include a Q&A area, advanced permission controls and notes and bookmarks. They also provide detailed recording of activities. Many cloud storage providers provide a higher level of customer service than traditional cloud storage. This includes multilingual assistance via phone, email, and in-app.

It is important to determine whether a data room in the cloud provider has ISO 27001 and SOC 2 accreditation. This is an independent audit which examines a company’s ability to protect sensitive data from dangers and confirms their conformity to internationally recognised standards.


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