The market for virtual data rooms is growing rapidly due to a surge in the demand for highly secure solutions for document exchanges among legal and commercial entities. Furthermore, healthcare projects typically require sharing confidential information with multiple stakeholders, which drives the adoption of VDR solutions. Virtual data rooms can also be used for fundraising activities that require transparency as well as document management.
The market for virtual data rooms can be divided into two deployment modes which are cloud-based or on premises. The latter segment had around 67 percent of the total revenue share in 2021 and is expected dominate in the forecast. This is due to the low-cost benefits provided by cloud-based VDR solutions as compared to on-premises alternatives. Moreover, the adoption of cloud-based VDR solutions among SMEs is expected to expand this segment further.
VDR solutions are widely used in the banking, financial services and insurance (BFSI) sector to streamline deal processes. Additionally, they are utilized by real estate companies to transfer documents to facilitate property purchases and sales. Additionally, the COVID-19 epidemic increased the necessity of remote work, driving the adoption of secure document transfer tools such as VDRs.
VDR demand is expected to grow in emerging economies such as China, India, Southeast Asia and many more. These countries are undergoing rapid growth in their economy and digitalization that creates a favorable environment for business transactions, including mergers and acquisitions. This will further increase the need for secure, efficient digital solutions.
