Does Sharepoint cover all your dataroom needs?
There are many document management solutions available, but in this article, we compare SharePoint and virtual data rooms.
While both tools have some common features, they serve different purposes. Virtual data rooms are built for high-level security and are designed to protect sensitive information during critical transactions. In contrast, SharePoint excels in supporting general collaboration and document storage for everyday use.
Understanding the key differences in security, functionality, pricing, and collaboration capabilities is essential for making the right choice. Those who make the right decision enjoy significant benefits, such as fewer security breaches and lower costs of damages and penalties if an incident occurs.
So, let’s explore the advantages and limitations of SharePoint and virtual data rooms to help select the best solution for your needs.
What is a virtual data room (VDR)?
A data room is a safe online space for storing, organizing, and sharing confidential documents. It serves as a digital repository, offering advanced features like customized document permissions, detailed activity tracking, and remote shredding to ensure that confidential documents are protected.
Unlike traditional file storage solutions, data rooms are specifically built to meet the needs of businesses handling critical data.
Key use cases of virtual data rooms include:
- Mergers and acquisitions (M&A)
Data rooms streamline the document-sharing process during M&A transactions, enabling secure communication between buyers, sellers, and advisors. Companies can upload financial reports, contracts, and other vital documents for review without risking data leaks. - Due diligence
During the due diligence phase of a deal, VDRs provide a centralized location for sharing sensitive files with potential investors or acquirers. The platform ensures only the right people can access sensitive information, minimizing risks while maintaining transparency. - Secure file sharing
Businesses often use virtual data rooms to collaborate on sensitive projects like audits, intellectual property development, or legal proceedings. The robust security measures prevent unauthorized access and ensure compliance with regulations. - Fundraising and capital raising
Startups and businesses seeking investment use online data rooms to share pitch decks, financial statements, and growth plans with potential investors, ensuring confidentiality and professionalism. - Real estate transactions
Buyers, sellers, and brokers use VDRs to share property details, financial records, and legal documents during transactions.
By combining security, efficiency, and accessibility, virtual data rooms have become a preferred choice for organizations looking to manage their sensitive data securely while maintaining seamless collaboration.
What is SharePoint?
Microsoft SharePoint is a web-based platform that helps organizations store, manage, and share information. It acts as a secure space where teams collaborate, access files, and streamline workflows from anywhere.
Here are some key functionalities of SharePoint Online:
- Document management
Store, organize, and share files in a centralized location with secure access controls. - Team collaboration
Create spaces where team members work together on projects and documents simultaneously. - Customizable sites
Build an internal SharePoint site for departments or projects, tailored to meet specific business needs. - Automation
Use tools like workflows and Power Automate to automate routine tasks, such as approval processes or notifications. - Integration
Seamlessly integrate with Microsoft tools (Word, Excel, Outlook, Microsoft Teams) and other business apps.
Typical use cases for SharePoint:
- Project management
Creating workspaces where teams can manage tasks, timelines, and shared files. - Company Intranet
Serving as an internal communication hub to share announcements, policies, or department updates. - File storage and sharing
Safely storing company documents while ensuring easy access for both internal and external users. - Process automation
Simplifying complex business processes, like employee onboarding or document approvals. - Knowledge sharing
Hosting wikis or knowledge bases for training and reference materials.
In short, Microsoft SharePoint helps organizations improve productivity by providing a secure and collaborative space for managing information and projects.
VDR vs. SharePoint: Key differences
Choosing the right platform for managing sensitive data greatly impacts the success of business transactions. To help you make an informed decision, let’s explore the key differences between virtual data rooms and SharePoint — two powerful tools with unique features designed for distinct business needs.
| Characteristics | Virtual data room | SharePoint |
| Primary purpose | Designed for secure sharing of sensitive information during high-stakes transactions like M&A, due diligence, or fundraising. | A general-purpose platform for team collaboration, document management, and building company intranets. |
| Data security | Encryption. All data is encrypted during transfer and storage to keep it safe from unauthorized access. User permissions. Administrators can assign granular permissions, such as view-only or restricted access, to specific users. Audit trails. Comprehensive tracking of user activity ensures transparency, allowing businesses to monitor who accessed or modified documents and when. | Encryption. Data encryption is provided but may require configuration for optimal security. User permissions. Role-based access control with permissions set at the site, document library, and file level. Audit trails. SharePoint provides activity logging, but its auditing features may require additional setup or third-party tools for detailed reporting. |
| Collaboration and document management | Securely facilitates collaboration between internal teams and external parties. Features tailored for deal management (Q&A tools, version control, notifications). | Supports real-time co-authoring, comments, and alerts. Ideal for internal teams collaborating on Office documents and projects. |
| Ease of use | User-friendly interface with minimal setup, designed for quick deployment during time-sensitive projects. | Moderate learning curve; requires training or IT support to maximize functionality and customization. |
| Mobile access | Fully optimized for secure mobile use, ensuring data protection across devices. | Mobile apps are available but require configuration to achieve full functionality and security. |
| Pricing models | Pay-per-user. Charges are based on the number of users accessing the VDR. Pay-per-page. Pricing is based on the number of pages uploaded or shared within the data room. Pay-per-storage. Charges depend on the amount of storage used for documents. Subscription-based. Flat-rate pricing for a set period, typically monthly or yearly. | Microsoft 365 subscription plans. Subscription-based pricing through various Microsoft 365 plans (Business or Enterprise). Scalable pricing structure. Costs scale with user count and add-ons, such as extra storage or premium features. |
| Use cases | M&A transactions, fundraising, due diligence, legal proceedings, and high-security needs. | Team collaboration, project management, intranet creation, and general document storage. |
Related resources: Check out our article on enterprise file-sharing vs data rooms to learn the differences and find the right solution for your business.
Using Ideals virtual data room vs. SharePoint
When it comes to managing and sharing sensitive documentation, an Ideals virtual data room and Microsoft SharePoint serve important purposes. However, they cater to different business needs. Ideals VDR is designed specifically for secure document sharing during critical processes like mergers and acquisitions, while SharePoint is a broader collaboration tool for everyday tasks.
One key advantage of Ideals VDR is its enhanced focus on security and document protection. It offers robust access security with granular permission settings, allowing administrators to define user roles and grant or revoke access to specific sections of the data room at any time. This precision is further supported by advanced features like two-factor authentication, which requires both a password and a single-use code for login, as well as time and IP address restrictions, which limit access based on location and session duration.
Ideals also allows administrators to customize document permissions, controlling who can view, download, print, or access files. Features like dynamic watermarking, which embeds user-specific details like name, IP address, and access time on documents, add an extra layer of protection.
In contrast, SharePoint provides basic user management and grants access functionalities, but it lacks the level of precision and security customization, making it better suited for everyday collaboration rather than high-stakes transactions.
Another standout feature of iDeals VDR is its built-in Q&A tools, which streamline communication during due diligence. Teams can ask questions and get answers directly from within the platform, keeping everything centralized and organized. SharePoint doesn’t include such specialized tools, making it less suitable for processes requiring frequent collaboration on secure documents.
Therefore, while SharePoint excels in general productivity, Ideals data room is unmatched when protecting documents and ensuring secure, streamlined workflows for critical business processes.
Key takeaways
- Virtual data rooms are designed to handle sensitive information during high-stakes business transactions such as mergers and acquisitions, due diligence, and fundraising. With security features like encryption, multi-factor authentication, and granular access controls, a VDR ensures that only authorized individuals can access critical documents.
- SharePoint is a better fit for general collaboration and document management tasks. It works well for storing, sharing, and managing documents within teams, creating internal communication hubs, and building company intranets. It’s perfect for internal projects where the focus is on efficiency rather than maximum security.
- Ideals virtual data rooms are a leading software solution for secure document sharing during high-stakes transactions. They offer advanced features like granular user permissions, dynamic watermarking, and time and IP address restriction, ensuring full control over who accesses your documents. Its streamlined Q&A tools and efficient deal management make it the go-to choice for M&A, due diligence, and fundraising.
FAQ
SharePoint allows you to store, organize, and share files securely, making it suitable for basic file sharing and collaboration. However, it lacks many specialized features that purpose-built data rooms offer, such as advanced document tracking and detailed user activity monitoring.
To make SharePoint function more like a VDR, you need to customize its security settings, permissions, and workflows, which can be time-consuming and complex. For highly sensitive projects like M&A, a dedicated VDR is often a better choice due to its enhanced security and ease of use.
The main difference is that a virtual data room is designed for the secure handling of sensitive information while file-sharing tools focus on basic collaboration. A data room offers advanced security features such as user activity tracking and strict permission settings, making it ideal for high-stakes processes like M&A.
File-sharing platforms, on the other hand, are simpler and lack these advanced controls, which can make them less secure for confidential documents. If security and compliance are critical, a data room is the better choice.
Virtual data rooms are used by professionals and organizations that handle sensitive information. These include investment bankers, lawyers, and private equity firms during mergers and acquisitions (M&A) to share and review documents securely. They’re also used by companies for fundraising, due diligence, IPOs, and legal audits. Essentially, any business dealing with confidential data that requires secure sharing and tracking can benefit from a VDR.
A virtual data room is more secure than SharePoint due to its advanced security features that are designed for sensitive information. For example, VDRs offer granular user permissions, allowing you to control who can view, download, or edit specific files.
They also use dynamic watermarking, which marks documents with user details to discourage unauthorized sharing. Features like two-factor authentication (2FA) add an extra layer of protection, and document expiration settings ensure files are no longer accessible after a set time.