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An online data room is an encrypted cloud-based platform that lets you share sensitive data with a variety of parties. These websites can be used to complete a broad range of projects including business deals and legal cases. These rooms have a range of security features, such as password protection and granular document access rights that can be set to the folder level. These rooms can also be configured to restrict access to the site based on IP address as well as date and time.

One of the most well-known uses for an online data room is in mergers and acquisitions where buyers require access to confidential documents. This process can take months, and companies must be able to securely transfer large amounts information. Virtual data rooms allow buyers to look over documents without going to the office of the company which can save time and money.

To use an online data room, users need to sign a nondisclosure agreement (NDA) before entering. They also need to create a username and password, and agree to the terms of service and privacy policies. Many vendors offer training programs to help users comprehend the system and how to get the information they require.

A reliable online data room service can allow you to control access to your documents. It will also monitor user activity for example, when they enter the room, what documents they are looking at and how often they look at them. The system will also allow you to backup your documents to a remote location in case of disaster.