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Why Are Some Virtual Data Rooms So Expensive?

    
virtual_data_room

The cost of wholesale data storage almost halves every year. These days, you can walk into Best Buy and pick up a terabyte of space on a hard drive for less than $100 . . . so you can imagine how inexpensive storage costs are for big cloud providers. As a consumer, paying a lot of money for data storage these days is like paying for fresh air.

When you sign up for a virtual data room or have one provided by your banker, you're likely committing to a substantial bill. It is tough to get much achieved for under $10k and a final invoice topping $50k is common. If you're selling your company and are about to hit the big time you probably won't care, but, if the deal is not an “ending event” where everyone cashes out and leaves the business - then it’s likely your CFO will care about the bill. For example, after financing rounds, joint ventures, and buy side transactions, the management team usually stay on and end up footing the bill.

Many bankers freely recommend solutions that are going to be expensive for their clients. Are they recommending software that's extraordinarily great to use? Fast? Reliable? Super secure? Not always. The client might accept the recommendation but it doesn't mean they like it and it doesn't mean they won't get a shock when the final bill arrives. For small to medium sized businesses, the "IBM" solution (“no one gets fired for recommending them”) simply might not be the best suggestion.

If any of this resonates you might be excited to hear that there are newer, easier and lower cost alternatives which can be found through resources like virtual data room comparisons sites.