Virtual Data Room market is expected to reach $3.6 billion by 2025 at a CAGR of 14.9% during the forecast period 2020-2025. The rising recognition of wealthy media content and mergers, acquisitions and so on are growing increasingly common as enterprises operating in saturated markets look for ways to expand and capture new business are also enhancing the growth of the Virtual Data Room market. Moreover, Virtual data rooms have increasingly replaced physical data rooms traditionally used to disclose and share documents. With the globalization of business and increased scrutiny to reduce costs, virtual data rooms have become attractive alternative to physical data rooms in the forecast period 2020-2025.
- North America dominated the market by a share of more than 38.5% in 2019, due to the increasing adoption of virtual data room services by various governments and businesses in developed economies, such as Canada and the United States.
- The adoption of virtual data room solution is increasing by the venture capital firms, as it enables these firms to conduct the processes associated with offering due diligence and document preparation in an efficient and cost-effective approach
- Cloud deployment is growing at a highest CAGR of 19.2% in the forecast period as it offers operational flexibility and to the companies compared to on-premises virtual data room solutions.
- Virtual Data Room top 10 companies include Brainloop AG, Caplinked Inc., Citrix Systems Inc., Drooms GmbH, Ethos data, Firmex Corporation, Intralinks Holdings Inc., Merrill Corporation Ltd, ShareVault, Vault Rooms Inc. among others.
By Deployment- Segment Analysis
Cloud deployment is growing at a highest CAGR of 19.2% in the forecast period as it offers operational flexibility and real-time deployment to the companies compared to on-premises virtual data room solutions. It also offers numerous benefits, including reduced operational costs, simple deployment process, and higher scalability in terms of connected resources. The cloud-based virtual data room solutions comprise applications with a set of multiple services that are compliant with the service-oriented architecture and provide robust transformation processes to meet business objectives. Additionally, the cost-effective cloud-based solutions ease installation when compared to the on-premises solutions. The highest level of data security and reliability offered by the cloud deployment are increasing the share of cloud deployment in the Virtual data room market in the forecast period 2020-2025.
By Industry Vertical – Segment Analysis
Virtual Data Room in IT and Telecommunications is growing at a CAGR of 18.5% in the forecast period. Virtual data rooms are merged into online meeting rooms for everyone involved in an agreement. Co-operation between parties has become simpler and more reliable, as VDR tools are available for use throughout the deal journey. Moreover, Blockchain-based technologies are emerging to enhance Virtual data room security across the IT ecosystem. Virtual data room applications are being extended beyond M&A activities, as, nowadays, most of the business operations are conducted online. In addition many prominent IT and telecom companies have integrated technologies that could offer them quick and efficient information and communication flow. 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 the cloud technology in the forecast period 2020-2025.
By Geography – Segment Analysis
North America dominated the market by a share of more than 38.5% in 2019, due to the increasing adoption of virtual data room services by various governments and businesses in developed economies, such as Canada and the United States, which are emphasizing innovation in these existing solutions. In addition the rising demand for easy and secure methods for the storage of critical data and the increasing need for transparent and efficient data sharing options are fuelling data security and secured sharing solutions. Moreover, the growing fundraising, rising number of mergers and acquisitions, joint ventures with some of the prominent players and advancements in existing technology have fuelled the market across the region. For instance, in April 2019, Citrix updated ShareFile Sync for Windows designed to provide ShareFile’s customers with an easy way to access and synchronize folders from ShareFile accounts to local computers. Hence these advancements are analyzed to drive the market in the forecast period 2020-2025.
Drivers – Virtual Data Room Market
- Advancements in Virtual Data Room tools.
With the continuous increase in volume of data and rise in data sources, organizations have focused on organizing and securely storing this data. The advanced capabilities such as access security, document security, and user interface of virtual data room have led to development of powerful platforms on which mergers & acquisitions (M&A) can be managed effortlessly. For instance, new partnership between Imprima and ZyLAB will offer customers advanced artificial intelligence (AI) tools to accelerate preparation of all-important virtual data rooms (VDRs) for merger and acquisition (M&A) and real estate deals. Moreover several companies are providing advanced features. The VDR provided by Box Inc., has plenty of features such as multi-sided data protection, secure storage, sharing, and easy document management. Similarly, Ansarada provides AI-powered VDR tools. Hence these advanced features are analyzed to drive the market in the forecast period 2020-2025.
- Increase in demand from venture capitals
The adoption of virtual data room solution by the venture capital firms is increasing, as it enables these firms to conduct the processes associated with offering due diligence and document preparation in an efficient and cost-effective approach as compared with physical data rooms. Increase in number of venture capital deals in recent past has led to higher demand for virtual data rooms. In addition, various firms have increased their usage of virtual data rooms due to the benefits offered by these services over physical alternatives, such as time & money saving and the possibility to involve a larger number of bidders in deals. The demand from venture capital firms is constantly growing in the forecast period. Thus, such extensive demand from venture capitals for VDR software is expected to boost the growth of the global virtual data room market.
Challenges – Virtual Data Room Market
- Data Privacy and Data Integration Issues
Although virtual data rooms offer many benefits, they are not suitable for every industry. For instance, some governments may elect to continue using physical data rooms for highly confidential exchanges of information. The damage from potential cyber-attacks and data breaches exceeds the benefits offered by virtual data rooms. The results of such events could be cataclysmic if threatening parties can access classified information. In those instances, the use of a VDR will not be a consideration. Hence these restrains are analyzed to hamper the market growth in the forecast period 2020-2025.
Technology launches, acquisitions, Partnerships and R&D activities are key strategies adopted by players in the Virtual Data Room market. In 2019, the market of Virtual Data Room industry outlook has been fragmented by several companies. Virtual Data Room top 10 companies include Brainloop AG, Caplinked Inc., Citrix Systems Inc., Drooms GmbH, Ethos data, Firmex Corporation, Intralinks Holdings Inc., Merrill Corporation Ltd, ShareVault, Vault Rooms Inc. among others.
- In 2018, Intralinks has made collaboration Capco to accelerate its collaboration capabilities without compromising on security.
- In June 2019: Diligent introduced Secure File Sharing and Secure Meeting Workflow applications, as part of the Diligent Governance Cloud. These applications enabled completely secure collaboration not only between board members and executives, but also reaching beyond the boardroom including auditors, regulators, and other key third party stakeholders.