Dropbox and Virtual Data Rooms Offer Different Solutions for Different Problems

A Look at Dropbox'

     According to Dropbox.com, over 200 million people and 2 million businesses use Dropbox.
Many users start with Dropbox’s free account which includes 2 GB of free space. While a free
account allows you to share documents with others, it’s not a full-fledged collaboration tool for
teams. That’s where Dropbox for Business comes in.
     Dropbox for Business is a paid service that starts with 1 TB of space for five users. Additional
space is available as needed at no additional cost, though price increases for additional users.
The paid version offers increased security, team management tools, collaboration features, and
integration with additional apps for businesses.

Features Include:

1. Versioning history This allows you to track changes.
2. Anytime, anywhere access to files Whether a single user uses multiple computers or a team is scattered across multiple locations, having all data centrally stored in the cloud is convenient.
3. Centralized administration Add or remove users, unlink lost or stolen devices, and view basic reports.
4. One-click sharing Instead of compressing and emailing large files, Dropbox users simply send a link to the desired file. The recipient clicks the link and immediately has access to the file
5. Restricted sharing With Dropbox for Business, you can restrict others from sharing shared folders and links outside of the team.

A Look At Virtual Data Rooms

   Virtual data rooms share many similarities with Dropbox, but they take security to a higher
level. Virtual data rooms are designed specifically for storing and sharing secure documents
such as financials and intellectual property.
    According to Do Virtual Data Rooms Add Value to the Mergers and Acquisitions Process?, a study
from the Institute of Mergers and Acquisitions and Alliances (MANDA), virtual data rooms are
used as technology-based due diligence tools that facilitate access and use of data in M&A
transactions. While the study examined virtual data rooms in relation to the M&A process, its
findings are relevant to other business use cases where sensitive data must be accessed and
shared in the most secure environment possible.

      For example, resources stored in a virtual data room may include sales, tax, legal, accounting,
risk and insurance, IT, human resources, environmental, sales, operations, property, intellectual
assets, finance, and other sensitive information. Meanwhile, in a due diligence situation, many
individuals on both sides need to access that information, making security a critical concern. Not only are there concerns about encryption so that hackers can’t intercept data, there are concerns about
sensitive data falling into the hands of individuals who have not signed a non-disclosure agreement or who were not intended to view the information.

     Virtual data rooms include features that address these concerns. Like Dropbox and other
cloud-based file sharing systems, virtual data rooms use strong encryption technologies such
as 256-bit encryption and SSL (secure socket layer) encryption. However, virtual data rooms
use these security features as the starting point. For example, SecureDocs, a virtual data room,
takes security even further by adding:

1. TSL (transport security layer): Both SSL and TSL protect documents that are in transit by using an encrypted connection to upload orBdownload files.
2. Permission-based user roles for user access Not all users need access to all information. Select, to the folder level, who can see what data.
3. Audit logs: Audit logs show all users’ activities and can protect you from liability. For example, if a user claims he never saw a required disclosure, an audit log will reveal the time, date, and user name for all views of that document. Not only can businesses gain assurance that all required documents have been viewed, audit logs are also useful in gauging potential buyer or investor interest in an acquisition or fundraising environment.
4. Watermarking: Watermarking reminds users that a document is confidential, and not intended for sharing or distribution.
5. Disabled printing Preventing users from printing a document provides greater control over secure documents.
6. Customizable non-disclosure agreement Upon entering a virtual data room, new users arepresented with either a standard or customized non-disclosure agreement to sign. This adds another layer of legal protection.
7. Indexing Documents in a virtual data room can be automatically indexed, allowing for faster searches.