27 . 08 . 2025

VDR VDR vs. Popular Cloud Drives – 5 Key Differences That Matter in Business Transactions

27 . 08 . 2025

Virtual Data Room
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Virtual Data Rooms (VDRs) have been the standard for years in the M&A industry, private equity funds, and due diligence processes. However, many organizations still believe that popular cloud drives such as Google Drive, OneDrive, or SharePoint are sufficient for sharing confidential documents.

At first glance, both types of tools allow for storing and sharing files. However, their purpose, the level of security, and the degree of control over data access are completely different. In high-value transactions, these differences can determine the success or failure of the entire process.

Why are cloud drives not enough in high-risk transactions?

Cloud drives are designed as tools for everyday internal collaboration within a company. Their security features focus on protecting user account access but do not provide full control over what happens to a file once it has been shared.

A VDR, on the other hand, is built from the ground up as a transactional environment, equipped with auditing, reporting, anonymization, restrictions, and advanced permission management mechanisms.

Key advantages of VDR over cloud drives

  1. Full control over documents – the administrator can see who opened a file, when, and for how long, and can revoke access at any time.
  2. Protection against data leaks – restrictions on downloading, copying, taking screenshots, and sharing files outside the VDR environment.
  3. Regulatory compliance – VDR meets requirements such as GDPR, MiFID, MAR, and local financial authorities.
  4. Anonymization of sensitive content – automatic redaction of personal or financial data without the need to create additional file copies.
  5. Real-time support – access to a dedicated technical team that resolves requests immediately, which is crucial in transactional processes.

Risk scenarios when using cloud drives in transaction processes

01. Unauthorized Access via “Public Link”

  • Scenario: An employee shares a due diligence folder with an investor using the “anyone with the link can view” option.
  • Risk: The link may end up with third parties (e.g., due to an email error or being forwarded). The cloud drive will not enforce login, and access cannot be fully tracked.
  • VDR Solution: Access only for verified users with individual logins; complete activity log.

02. Lack of Control Over Copying and Screenshots

  • Scenario: Financial documents are being viewed online by a potential buyer. Nothing prevents them from taking screenshots or copying data into their own files.
  • Risk: Data could leak before negotiations are completed, reducing the transaction’s value or exposing the company to legal liability.
  • VDR Solution: Screenshot blocking and watermarking documents with the user’s identifier.

03. Lack of Access Audit

  • Scenario: During a transaction, there is a question of who has viewed a specific file and when. Cloud drives only allow checking the latest modifications, not the full history of access.
  • Risk: Uncertainty about whether the investor has actually reviewed the documents limits control over the process and may cause delays in the schedule.
  • VDR Solution: Activity reports allow tracking who logged in, when, and how much time was spent reviewing a document.

04. Regulatory Non-Compliance

  • Scenario: Documents containing personal data or trade secrets are stored on servers outside the EU.
  • Risk: Violating GDPR or industry regulations (e.g., local financial authorities, MAR) could result in financial penalties or halting the process.
  • VDR Solution: Data centers in the appropriate jurisdiction, ensuring full compliance with legal and industry requirements.

05. Lack of Immediate Support

  • Scenario: On the day of signing the agreement, a key user cannot access the documents, and the cloud drive support responds only after several hours.
  • Risk: Delays could push back the transaction’s closing date or even lead to its cancellation.
  • VDR Solution: 24/7 support with guaranteed response in minutes, not hours.

Comparison table – VDR vs. popular cloud tools

Not all file storage tools are created equal. The table below highlights how a Virtual Data Room stands out compared to popular cloud solutions, particularly in terms of document security and control.

Fordata VDROne DriveGoogle DriveSharepoint
Clear folder and file structure with one-click access granting/restriction+---
Advanced encryption++++
Activity reports (e.g., who opened a file, when, and for how long)+---
Protection against copying and downloading++++
Information on when and for how long users logged into the system+---
Data anonymization capability+---
Built-in watermarks+---
Screenshot blocking+---
Permission assignment at the file upload level+---
Built-in antivirus system++++
No public link access+---
Dedicated project manager+---
User activity tracking (opens, logins)+---
Support for complex transactions+---
Intuitive user interface++++
Scalability+-++
Cost++++
Integration with business systems-+++
Customization and personalization++++
Automatic backup creation++++
Support for various file formats++++
Real-time collaboration-+++
Advanced user permission management+--+
24/7 technical support+---

When confidential data is at stake, compromises are risky

Cloud drives are excellent tools for everyday office work, but in a transactional environment, they do not provide sufficient control, auditing, or security. A Virtual Data Room is designed for processes where every document access is monitored, and data leaks are completely prevented.

In the context of mergers and acquisitions, due diligence, or asset sales, choosing between a “regular cloud” and a VDR is not just a matter of convenience—it is a decision about whether confidential data will remain confidential.

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They say I am the most analytical mind in the marketing team. But it truly is the sheets, statistics and thorough analysis for me which turn action into success - and not only in marketing. An oasis of calm by default, I will gladly take the adrenaline shot on the car track. I value a good atmosphere while working with the team. And that’s definitely not missing in #FORDATAteam.

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