They’re becoming an important part of mergers and acquisitions (M&As). A secure file transfer protocol (SFTP) enables companies to send confidential files through an encrypted connection. Traditional VDSs are usually better at handling smaller transactions than larger ones. However, these types of services aren’t always optimal when dealing with big sales.
What is a virtual data room?
A digital data room is an online place where companies keep their files. A digital version of a traditional data room. With data rooms, companies can safely store confidential documents online for their employees and business associates to view anytime they need them.
Virtual data room pricing explained
Most VDR (virtual data rooms) vendors still charge by page rather than by download.
Prices vary depending on transaction sizes and values; however, they usually start at $20,000 and go up to $40,000 (or even more). Overages can be quite costly. For example, we’ve seen invoices for $50K+ due to overages and extended timelines.
But VDR technology has advanced even further, so its prices need to advance too.
Pricing depends on project value, size, and duration. Here are some common FAQs for people who want to learn:
- Average VDR costs for M&As include acquisition fees, legal fees, professional services, marketing expenses
- A virtual data room has three main functions – storage, collaboration, and presentation. These three functionalities affect pricing.
Virtual data room pricing structures
VDRs cost different amounts depending upon which company you use for hosting them. There are several ways for companies to structure their virtual data rooms (VDR).
Per-page
Web hosting companies usually charge per page rather than per month. If a company has no previous experience creating websites, they might be able to create one at an hourly rate ranging from $0.40 to $1 per hour. You may not be interested in paying extra fees if you’re just doing smaller projects. However, if you need some extra storage space, then this plan could interest you. Billing methods that involve hourly rates may result in bills that are too high and/or include unnecessary fees.
Per-user
Most VDRs provide free trial periods for new users. You might need to buy another license if you decide to use the software for something else. Vendors who offer trial periods might give out fewer user accounts than those without them. Typically, data room providers charge from $100 – $250 for each administrative user. You must first decide which type of cloud storage service would be best suited to meet your needs before signing up for one. Ask if there’s an additional fee per person added to their list.
Storage Size
Depending on which VDR provider you choose, some may charge by the GBs offered rather than per month. Many VDR service providers charge for every gigabyte (GB) of storage space consumed by their clients. Service providers may charge either a flat monthly fee for each GB of traffic they send through their network or a set daily cap on usage, then bill extra if you exceed that limit. Your internet service provider may charge you between $0-$75 per GB depending on their plan. For projects where file sizes don’t exceed 10MB, this may be an acceptable pricing strategy.
Flat Monthly Fee
Typically these plans offer some level of data storage, allow for an unlimited amount of web pages, and range between $400-$1,000/month.