Virtual Data Room Market - Growth, Trends, and Forecast (2022 - 2027)

The Virtual Data Room Market is expected to reach a CAGR of 16.2% over the forecast period. Increasing adoption of cloud storage technology is contributing to the growth of the virtual data room market, as it is a cost-effective way to eliminate the need for physical storage, reduce the use of paperwork, and decrease the cost of travel.

Key Highlights

• VDR providers offer features that secure online storage and access by complying with strict world-class standards. For instance, most vendors are ISO 27081 certified, an optimal certificate that every VDR should have. In addition, VDRs offer security measures that prove their reliability and holistic approach to protecting online documents. Some of the VDR's security features include continuous data flow, multi-level encryption, watermarking, and user activity auditing.
• The industry offers various options for VDRs that one can easily choose one of the rooms. The cost of the service depends on several factors, including the size of the storage, additional options, and the availability of special tools. VDR providers offer different pricing options, and some vendors provide specific feature sets, different pricing, security measures, and ease of use, which are vital aspects that may vary from vendor to vendor.
• Also, increasing traffic in the prime data management establishments, such as data centers, which in most cases, are not designed to perform secure transactions, is another excellent factor driving the demand for VDRs.
• Virtual data rooms are well-known as protected and secure document repositories used by enterprises or units being purchased or marketed. Companies and other interested parties use data room suppliers to create a virtual data room that acts as a controlled environment where security can be maintained. These solutions do away with the need for physical document storage and can be used by parties in various time zones. Virtual data room providers provide a wide range of useful features for businesses, which is expected to drive the market demand during the forecasted period.
• For instance, in June 2021, the Shipping Corporation of India established a virtual data room for possible bidders. The bidders will be able to get complete financial information about the company and examine financial liabilities, contracts, and other necessary material to make a financial bid via the virtual data room.
• As virtual data room is becoming increasingly popular, authorized users are granted access to the information stored electronically on the server. Most legal data is sensitive and needs high security; thus, businesses are focusing on secure data sharing by enhancing their services and software during business deals. Many organizations opt for virtual data room solutions to secure their financial data while sharing it with other parties undergoing business deals.
• Over the past few years, the VDR market has experienced prominent growth due to its adoption across various enterprises as an important tool, along with the increasing demand for risk management, need for intellectual property, increasing adoption of the cloud, and growing amount of business data arising from business deals, which have fuelled the demand and requirement for VDRs.
• VDR Workspace Insights Increase Security, Save Time, and Aid Users in Finding Investors. Businesses rely on data and documentation to guarantee that transactions run smoothly and securely, from finding early investors to managing mergers and acquisitions. This necessitated the parties concerned to meet in person, in a tightly protected room, back in the days of physical contracts and corporate record books. Now that the great majority of data has been digitized, businesses are turning to virtual data rooms, or VDRs, to better manage these transactions and interactions while maintaining security.
• VDRs gained more importance during the COVID-19 pandemic due to the increasing need for virtual workspaces, data repositories, and deal rooms. As VDRs allow users to conduct online meetings, start group conversations, work on shared documents, collaborate on different projects, and share updates, COVID-19 has positively impacted the market's growth.

Key Market Trends

IT and Telecom Sector is Expected to Hold a Significant Market Share

• The virtual data room has evolved across the IT space to become a tool to promote the entire venture, thereby widely finding applications for deals across various end-user segment ventures with the growing application of cloud technology. In order to build success in a highly competitive environment, IT and telecommunication must meet the requests of their customers, partners, employees, and capital owners, more securely and reliably. Although many solutions have been developed, many companies do not have integrated technologies that could offer them quick and efficient information and communication flow.
• The VDR providers are revolutionizing business transactions, and access from anywhere, with any device, at any time is now possible. It provides secure data management tools and storage environments, saving clients time and money. VDRs have emerged into online meeting rooms for everyone involved in an agreement. Cooperation between parties has become more straightforward and reliable since VDR tools are available throughout the deal journey.
• The industries worldwide, such as BFSI, Retail, and eCommerce, are adopting this platform at a higher pace due to the increased focus on increased customer satisfaction and providing better-personalized experiences.
• For instance, In October 2021, CapLinked, Inc., a cloud-based information control software creator, was chosen by middle-market investment banks worldwide to handle their transactions and due diligence workflow. Middle-market bankers require virtual data room (VDR) technology that is dependable and simple to use in a fast-paced and competitive deal environment.
• The key players in the market are involved in strategic partnerships, which assist the company in remaining competitive in the market. For instance, In November 2021, Siemens entered into a deal with Google Cloud, a cloud computing service package. Google Cloud would assist Siemens in digitally changing Siemens Energy's business infrastructure, systems, and data under this partnership. Furthermore, Google Cloud would assist Siemens in migrating its global network of data centers to the cloud.
• The security protocols around the opening, sharing, and printing of documents create a detailed activity trail for participants and auditors. Now, blockchain-based technologies are emerging to enhance VDR security across the IT ecosystem. Virtual data room applications are being extended beyond M&A activities, as most business operations are conducted online these days.

North America is Expected to Hold the Largest Market Share

• Increasing adoption of virtual data room services by various governments and businesses in developed economies, such as Canada and the United States, is driving the market growth. The increasing demand for easy and secure methods for storing critical data and the growing need for transparent and efficient data sharing options fuel data security and secured sharing solutions. During the forecast period, data security and secure sharing solutions are likely in great demand across the region.
• Moreover, the rapid expansion of domestic enterprises and infrastructure development across various end-user segments are expected to drive the market's growth. North America is presumed to be the most significant revenue-generating region, as there is a particular focus on innovations in the US and Canada. These nations have the world's most competitive and quickly changing virtual data room markets. A higher rate of infrastructure growth and the massive growth of data from all industry verticals are expected to make North America one of the top potential markets for growth.​
• Because of the rising focus on greater customer satisfaction and providing better-personalized experiences, industries in the United States, such as BFSI, Retail, and eCommerce, are embracing this platform faster.
• In May 2021, CapLinked, Inc., a cloud-based information control software developer, announced the addition of additional municipal and county government clients to its platform. The cities of Brea, Huntington Beach, Newport Beach, and Orange County Sanitation District have joined a growing number of institutions worldwide that use CapLinked's software to handle the sharing of sensitive information.
• The growing fundraising, rising number of mergers and acquisitions, and joint ventures with some prominent players have fueled the market across the region.
• The rising demand for easy and secure methods for storing critical data and the increasing need for transparent and efficient data sharing options are fueling data security and secured sharing solutions, which are likely to be in great demand across the region during the forecast period. Some prominent market players across the region include Citrix System Inc., EthosData, Intralinks Holdings Inc., Merrill Corp. Ltd, Brainloop AG, Firmex Corp., Drooms GmbH, and CapLinked Inc., among others.

Competitive Landscape

The Virtual data room market is moderately concentrated, shifting towards a fragmented market due to the number of companies foraying into the market. Some key players in the market include Citrix Systems Inc., Intralinks Holdings Inc., and BMC Group Inc. (SmartRoom).

• November 2021 - The Central Bank of Nigeria (CBN) announced the launch of the "eNaira," a central bank digital currency (CBDC) based on blockchain technology. eNaira can be held in digital wallets, utilized for financial transactions, and transferred digitally via an eNaira wallet.
• July 2021 - Disinvestment-bound Shipping Corporation of India opened a virtual data room for potential bidders to obtain detailed financial information about the company and scrutinize financial liabilities.
• July 2021 - Data site, a software firm based in the United States, paid an unknown sum for Firmex. With this acquisition, the data site will expand its subscription-based business, contribute to the company's rapid growth, and leverage the company's deep topic experience to support Firmex's continuing expansion. Firmex is a virtual data room service provider based in Canada.

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