The demand for virtual data rooms has grown significantly over the past few years, although they were first created in the early 2000s. Now it is a rapidly growing and popular tool among business organizations. These programs have helped ensure the comfort and security of using documents without the need for a face-to-face meeting. As the demand for data rooms has increased, the VDR market has grown significantly over the past 15 years, and the current revenues from VDRs amount to over $800 million. In this article, we’ll take a closer look at how the data room market has evolved and how it has changed for 2021.
What is a virtual data room?
Virtual data rooms can be compared to a digital library that holds all of a company’s valuable data. It used to be about the same. Companies stored all documents in a designated location, and during transactions, met with their potential partners in that location, discussed issues, and exchanged documents. But it was inefficient, insecure, and very tedious.
With the advent of technological progress came VDRs, which completely replaced physical buildings and paper documents, as well as providing proper security and introducing automation or even artificial intelligence features.
Data rooms help reduce your precious time and money as the M&A process and other business transactions take up too many resources, they help you structure your data and have access to the information you need anytime, anywhere.
VDR growth and statistics
Significant revenue growth in the VDR market occurred in 2016, and as the statistics showed, most of that revenue came from big business companies, but smaller companies are also thriving on it. Things are going very fast in the market right now, with specialists predicting that annual supplier growth will be around 12% or even higher, so we can pretty much assume that VDR will get more attention from investors, and get proper funding into their technology.
Key Market Trends
IT and telecoms are expected to take a larger share of the market, and VDR as a part of it has improved dramatically in recent years. Right now, virtual data rooms are as follows:
- VDR has spread to the online meeting rooms of everyone who participates in the agreement. Interaction and communication are now several times easier and more convenient. It’s also much more secure because VDRs protect all processes within the program and offer their tools throughout the entire transaction process
- Blockchain-based technologies are emerging that greatly increase the level of security that VDRs provide. Since most of today’s business transactions take place online, many IT companies offer integrated technologies to improve the efficiency and speed of information transfer and communication
- There has been a significant improvement in VDR across the IT space, and it can now act as a company-wide promotional tool
- North America now has the largest share of the virtual data room market, as it is now actively using this tool in its activities, including not only commercial organizations, but also government and medical enterprises
- Security is now a major issue for everyone, and therefore the demand for simple and secure spaces to store valuable data is more important than ever. The demand for VDRs is also growing because of their transparency and easy sharing
- Growing demand for VDRs will also grow because of increased due diligence, fundraising, and M&A activity, which will increasingly spread throughout the region