Virtual Data Room vs. Cloud Storage: What’s the Difference?

Virtual Data Room vs. Cloud Storage: Revolutionary advancements in information technology have opened up so many options for businesses to store their business data. There are literally hundreds of options for firms nowadays, and most of those options are cloud-based. With so many free solutions available, businesses still increasingly rely on paid tools such as virtual data rooms.

The question here is, why would someone go for paid options such as virtual data rooms when they can use other free cloud storage instead? And what is the difference between a virtual data room and a cloud storage solution? Let’s find it out.

What is cloud storage?

Cloud storage or cloud computing is an online platform where users can store and exchange data through internet-based apps and tools. However, it is important to note that cloud storage is not entirely virtual. Every cloud-based platform has to host servers that contain the user data as well as the software data.

What is a virtual data room?

Virtual data rooms are basically cloud-based online data room software that specializes in secure data storage and transference. The best thing about virtual data rooms is that they comply with international data security standards/protocols, which make them more secure and reliable platforms.

Virtual data room vs. Cloud storage: Top 5 differences 

  • Security and simplicity

Virtual data rooms are simpler in comparison to traditional cloud-based storage. That is because conventional storage options are more time-consuming and tedious. In fact, most of the time, the transactions in traditional storage rooms take place under a lawyer’s office to ensure security. Now, that might look secure, but you cannot neglect the maintenance cost associated with it.

On the contrary, a virtual data room keeps your data safe on a highly secured server. The users can access it from anywhere according to the access permissions from the administration panel. Moreover, the administration can impose access restrictions on downloading or copying any document. This option is not available in traditional cloud storage.

  • Efficiency

Virtual data rooms are more efficient than traditional cloud storage, especially when it comes to closing deals. Virtual data rooms are fast and cost-efficient as well. Most importantly, with the help of virtual data rooms, you can reach multiple bidders simultaneously.

With traditional cloud storage, the bidder needs to have an appointment before holding the meeting. In contrast, multiple bidders can access the virtual data room simultaneously. Now, this not only saves a lot of time but also increases the bid value by 20-30 percent. In short, if you are using a virtual data room, you have more chances of converting a bidder into an actual buyer. 

  • Ease of use

Virtual data rooms are very easy to set up. It only takes a few hours to get your virtual data room up and running. Moreover, you will have all your business data on your VDR in just a few days. Apart from that, virtual data rooms allow you to monitor all the activities in the data room easily.

For example, in virtual data rooms, you can monitor who accessed the data room and when. You can also keep an eye on bidders who accessed the data room. Can you get all these benefits in traditional cloud storage? Look no further, the answer is no.

  • Effective communication

Communication is easy, smooth, and confidential in virtual data rooms. What goes between the company and the bidder is always safe and classified. Moreover, if there is something a company doesn’t want to disclose to every bidder, it can communicate privately with the relevant bidder without exposing private information to every bidder. 

Obviously, this functionality is not provided by cloud storage yet.

  • Valuable insights

Virtual data rooms boast reporting tools that provide valuable insights according to the company’s interests. Timely insights about the bidders can help a business strengthen its position. Does traditional cloud storage give this option? Just like in the cases above, the answer is no.

Apart from that, here are some other differences of a virtual data room vs cloud storage.


As you can see, virtual data rooms are way more secure, safe, and efficient, with so many features that you cannot get in traditional cloud storage. Some might argue about the costs of virtual data rooms. Yeah, if you think your business data is not worth thousands or millions, then free cloud storage will be the right option for you. But the truth is, a virtual data room’s benefits can simply outweigh its cost.

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