Safe data storage, faster data sharing, and uninterrupted communication are the common benefits associated with virtual data rooms. It is needless to say that getting services from the best virtual data room providers should be the aim because you cannot compromise on your data security and features mentioned above.
However, one crucial thing that you cannot ignore is the data room pricing. Data rooms are immensely diverse and cost-effective solutions, but sometimes, a lack of knowledge may cost you more money than you should spend.
That said, businesses often end up paying money for features they don’t even need or excessive data storage capacity. That happens because buyers are often unaware of different data room pricing models.
Today, we are going to explain some standard data room pricing models, how you can save money by choosing the right pricing method, and how data rooms reduce your administrative expenses.
Most of the buyers are not aware of the fact that data room vendors now follow different pricing models. That’s mainly because a large number of virtual data room providers are still stuck at the per-page pricing method.
Page-page is a method in which the data room vendor charges you for every page or document you upload in your VDR. Generally, you are charged $0.40 to $0.85 per page. Now, imagine if you opt for this model during an M&A transaction or fundraising.
It can cost you far more than your expectations, between $20,000 to $40,000 for one M&A deal. As a matter of fact, some mergers and acquisitions went over $100,000 in terms of data room costs.
So how should you go about it? First things first, always look out for pricing plans whenever you compare virtual data rooms. Following are different data room pricing strategies and their average costs. You can decide which one suits you better.
Many data room software vendors follow the per-user pricing strategy. In this model, a limited number of users can be added to the standard pricing plan, and any additional user (exceeding the limit) will be additionally charged by your service provider.
Generally, most of the data room services charge between $100 to $250 per user (exceeding the standard limit). One of the most important things you should do is check the maximum number of users allowed by the company without extra charging.
The per-user method is suitable when you have a fixed or limited number of employees, and you exceed your user limit occasionally and temporarily.
As mentioned earlier, many data room providers still rely on this pricing model, which charges the users for every document/page they upload. The average cost falls between $0.40 to $0.85 per page.
Per page may seem an expensive method for large-scale transactions such as acquisitions, mergers, and capital or fundraising, but they are highly recommended for small projects when you know the exact amount of documents to be uploaded. For example, you can use this model for presenting confidential study findings, which usually consist of a few pages.
Data room vendors also charge you based on the electronic data room storage size. This data room pricing model has two further types.
- Per-GB (gigabyte) charge where you have to pay for every GB of data you upload.
- Fixed storage, in which the vendor charges a specific amount for fixed storage size, and anything above that is charged separately.
Exceeding the fixed limit may cost you up to $75 per GB. Again, this pricing model benefits you in small projects.
In the flat monthly fee pricing model, the vendor charges a fixed amount for a specified number of users and storage size. The average costs in this method range between $400 to $1000 per month, which may be billed monthly, semi-annually, or annually.
The good thing about this pricing model is that some vendors offer unlimited data storage and sometimes no user limit.
A flat-monthly fee model is an excellent option for enterprises, corporations, and other large-scale businesses that employ hundreds of employees and store data in massive quantities. This model is highly suitable for M&As. Even if you don’t run a large-sized business, you can opt for this pricing model to save data storage costs in the long run.
How do virtual data rooms reduce administrative expenses?
Online data room software can be expensive sometimes based on your usage. However, you cannot neglect the fact that they also help you reduce your administrative expenses.
For example, these paperless solutions minimize the paper and printing expenses which can consume hundreds and thousands on a yearly basis.
Apart from that, you can get your business documents audited on your VDRs, saving food, traveling, and residence expenses of the audit teams. You can also minimize your meeting expenses by using VDRs as a mode of communication.
Virtual data rooms are only expensive when you choose a pricing model that doesn’t suit your business needs. Other than that, virtual data rooms are more cost-effective than paper documentation and other common data storage options.