Data Room Software Vs. File-Hosting Services

Cloud-storage makes it possible to store and sort files in online storage and access them from anywhere. Thus, in this article, we will compare two variants suitable for business needs – and file hosting service.

File-hosting platform or data room: how to differentiate?

Cloud computing is a rapidly growing market segment. Whether for private or work purposes file hosting or cloud storage services for backing up, synchronizing, and sharing files are practical and popular. Several services can be combined under a single file hosting service. 

File-sharing and cloud storage sites have grown in popularity in recent years and the popularity has expanded to include business use. These sites now offer businesses a safe and convenient way to store and share files with partners and sometimes even customers.

With a file-hosting service, you can upload and manage your files on the Internet. There are many free file hosting and sharing services. File-hosting is a good variant in case you need to upload a file quickly. Because in comparison to cloud-based data room firstly you need to register, then log in, and only after that you can get the link and share it if you want.

What about the security aspect?

When it comes to electronic data transfer or virtual data storage in the cloud, companies must take several protective measures to be able to use these solutions securely. If this is observed, both methods offer great added value for companies and organizations. Dropbox, FTP, or email are insecure without additional encryption. Managed file transfer systems separate data transfer and receive notification and also encrypt files and data transfer. With virtual data rooms, the location of data storage and data encryption is crucial. Self-hosted systems offer higher security and can be integrated into the security concept. The low additional effort and costs are significantly exceeded by the fast and secure exchange of data and knowledge.

Virtual data rooms offer many features that traditional file-sharing service simply doesn’t have. Secure data room can be used for all purposes – M&A, due diligence, or just for secure data exchange in the cloud. Revision security is given in all respects. The flexible web interface supports the currently available security mechanisms – including end-to-end encryption. Even e-mails can be sent encrypted to the data room and stored there using an Outlook add-in.

Users without special rights cannot download, edit or print files. A security viewer displays documents directly in the browser without transferring the data. In addition, documents can be output as PDFs with a personal watermark.

Benefits of the data room storage

Virtual data room has the following benefits in comparison to file-hosting platforms:

  • The data room solution is seamlessly integrated into the company’s security concept.
  • The security measures of the data room are stronger. The transmission and storage of business files are end-to-end encrypted using AES 128-bit or 256-bit algorithms at all times and in all places.
  • Access and usage rights are managed and controlled centrally.
  • Repetitive tasks can be automated to save valuable resources and increase productivity.
  • The effort for installing and operating the system is as low as possible for IT administrators.
  • The costs for installing and operating the system are optimal concerning the benefits for the employees and the company.
  • If you use a data room, you have more options for sharing links than with a pure file hosting service.
  • The software automates successive operations performed by employees of the company.
  • If you used a free trial, the speed of downloading or uploading files via file hosting services is limited. In the case of the data room, speed is mainly affected by distance.
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