Suppose you’re a data room user or have recently explored the data room market. If so, you’re probably familiar with the two or three biggest legacy data room providers, which have been around for years and make up a large part of that market. And if you’ve priced the offerings of those legacy providers, you know that data rooms can be extremely costly.
The pricing also tends to be somewhat cryptic, with out-of-pocket costs that increase rapidly based on how many pages you upload, how many people you provide access to, and several other features. This approach to pricing leaves many people wondering why secure data room technology has to be so complicated and, frankly, so expensive.
The Origins of Secure Data Rooms
It’s interesting to look back more than a decade at the origins of secure data rooms. Companies developed the big, enterprise-level data rooms at a time when technology infrastructure was very costly because virtually every aspect of it had to be custom-built. Often that required even creating the building blocks of secure data rooms from scratch.
For example, giving data rooms the level of security the market demanded required firms to build expensive technology stacks. In addition, browsers were far less secure–as was the internet in general–so firms had to take measures to account for potential gaps in other pieces of the security puzzle.
The result was significant capital outlays by a few big software providers, and companies were left trying to recoup large investments by charging high prices to their customers. Plus, pricing got complicated when these providers recognized that there was a real cost associated with, for instance, uploading another 100 pages to a server. As a result, companies decided to “nickel and dime” clients to cover that cost—and then some!
Secure Data Rooms: A Challenging Business When Not Approached the Right Way
One of the big data room providers that have been around for years still has never been profitable and carries a large amount of debt. The reason they’re facing those financial challenges is that to turn a profit at their scale would require many firms each paying them a lot of money.
And a significant part of their debt is from building their own technology stacks and developing their infrastructure from the ground up. Those efforts were successful, to a degree, but at what cost? When wrestling with that kind of debt, there’s little revenue left over for funding a cutting-edge research and development (R&D) program.
Today’s Secure Data Rooms and the Availability of Infrastructure
No question about it: Providers of today’s secure data rooms have benefitted from the efforts of legacy companies. We can leverage technology they developed or refined at a much lower cost than they faced when creating it.
The cost of storage, for example, has gone down dramatically in the last decade, as has the price of enterprise-grade security in the cloud. So now it’s possible to provide a comparable level of protection without having to incur the costs of creating that infrastructure, and storage is so cheap that the cost of storing an additional 100 or even 1,000 pages is negligible.
Secure Data Rooms and Online Behavior
Another change we’ve seen is that the way people share information and interact with one another is significantly different today. Most of us don’t think twice about sending information, shopping, or banking online.
In the financial sector, there remains a need for robust security features. But if we look around at how the internet functions and how people work today, there simply are fewer worries about security. Perhaps this is because there is a little bit of security “baked into” all the tools and platforms we use, so, at some level, we feel that our overall level of digital safety is relatively high.
Consequently, many data room users continue to pay for expensive security features that may not be relevant or necessary for their business. They do this because they don’t know that there is a system available that is just as secure (if not more so) while also being significantly less expensive.
Our ShareSecure product is a secure data room that meets those criteria. If you’re using a legacy data room—or aren’t yet using any data room—you owe it to yourself, your coworkers, and your stakeholders to check it out and schedule a demo.