Virtual data rooms can be utilized in a variety situations to facilitate secure document sharing without the need for costly physical facility. VDRs are usually employed during due diligence in mergers and acquisitions. However they can also be used to share documents between business partners, customers and other stakeholders.

A virtual data room is an ideal solution for M&A transactions since it allows sellers and prospective buyers to look over documents in one location, without exposing sensitive information. Similarly, investment bankers often use VDRs to share confidential documents with clients and other stakeholders for M&A and capital raising procedures. Technology firms make use of VDRs to share design plans as well as manufacturing information with teams that are spread across the world. Consultants make use of them to discern patterns from large data that can inform corporate strategy.

A VDR can also reduce M&A costs by eliminating the need for printing and travel costs, and by allowing access to documents faster than would be possible with a physical repository. It is also easy to customize the storage structure to fit every project and to provide restricted access to documents on a document-by-document basis.

VDRs are typically accessed via a web browser, so users can view documents anywhere they have internet access. Administrators can access detailed reports of user activity including who read what documents and when they were viewed, as well as the location. This provides information that is not available with physical storage. Access logs only provide information about who has accessed what and when.