With the virtual data room market worth about $3.66 billion, it is no wonder that virtual data rooms are considered a vital business investment.
However, did you know that some businesses paid as much as $100,000 for using data room services for a single transaction? The virtual data room market has recorded these sorts of stories where companies spent a lot higher than they should. It happened due to insufficient knowledge about the virtual data room pricing mechanism.
Generally, when decision-makers compare virtual data rooms, they often overlook the importance of considering the pricing models — their pros and cons. Ultimately data room software becomes an expensive option for them.
If the same is the case with you, here is a comprehensive guide on data room pricing. You will learn about standard data room pricing methods, their pros and cons, how much you can expect to pay for data room services, and what to consider when choosing the right VDR pricing model for your business.
How much does online data room software cost?
How much an electronic data room costs depends on the vendor you choose. For example, new or less-known vendors may charge you less in order to promote their products and services.
Similarly, some data room providers offer discounts on longer subscriptions. That said, if you want to be billed annually, you are most likely to use a VDR for a year. In this case, you may get an extra discount. Moreover, loyal customers and nonprofit organizations also get discounted prices.
A virtual data room may cost you between $25 a month to over $1000 a month. However, it mainly depends on the types of services you render.
Virtual data room pricing methods: Pros and cons
“Cost-effectiveness is a primary selling point for data room vendors, and it is their responsibility to guide their potential clients with 100% honesty,” says Ronald Hernandez, Founder dataroom-providers.org.
According to Hernandez, some of the best data rooms in terms of pricing are iDeals, Intralinks, Caplinked, Merrill, and Smartroom. These virtual data room providers are more transparent about pricing and offer customer-friendly pricing methods.
So, let’s understand what makes pricing of certain vendors better and more cost-effective. Here is what you need to know about data room pricing models.
It is the oldest VDR pricing model and is almost obsolete in the modern-day VDR market, used primarily by startups and small businesses. In per-page pricing, the data room vendor charges you for every single page uploaded/added in the data room. What’s important to understand is that you have to pay per page, not per document.
For example, if you have 10 documents having 10 pages each and the vendor charges $0.30 per page, you will pay $30 for 100 pages. The average per-page pricing nowadays ranges between $0.40 to $1.
Per-page pricing is suitable for short-term projects where you have to share a small amount of data. It is not recommended for dealmaking such as M&As.
Per-user pricing is highly recommended for small businesses or remote teams. In this pricing model, the vendor either charges:
- A fixed amount for a specified number of administrative and guest users
- Every administrative or guest user individually
If you want to add more users than your maximum limit, you will pay extra. The average cost per administrative user is between $100-$250.
You can also render data room services based on storage-based pricing. That said, you will have to pay for the total data storage you use.
Generally, the vendor allows you to use a predetermined storage capacity at a fixed price. The bigger the package, the greater the chances for a discount. On average, the vendors may charge up to $75/GB. Again, it is only suitable when you don’t have to store or share large amounts of data.
Flat monthly fee
The best data room providers usually charge a monthly fee for their services. The customers are billed monthly, quarterly, semi-annually, and annually.
Service providers charge a fixed monthly amount for specific services in this pricing method. Also, you can choose from different usage plans according to your needs. For example, iDeals offers three major packages for small businesses, medium-sized businesses, and enterprises.
The pricing plan works best for long-term usage, and most importantly, every business type or size can choose a package according to their needs. Depending on your chosen plan, you can expect to pay between $275-$2000 per month.
What to consider when choosing a VDR pricing plan?
It is conclusive that the data room pricing plan should be according to your needs, business size, and nature of the project.
For example, if you just want to pitch your proposal to different biotech investors, you might want to choose per-page pricing as it will be a one-time, short-term project.
Similarly, small and medium businesses may want to go for standard packages that offer a limited number of users, administrators, and storage capacity.
What’s more, you might want to consider the type of features you want in your VDR because it will affect the prices.
Wrapping it up
Determining your business needs, the scope of the project, and the time period for which you want to render virtual data room services play an important role in choosing the right VDR pricing model.
Common methods include per-page, per-user, storage-based pricing, and a flat monthly fee. It is important to consider your needs, business specifics, and budget limitations when choosing an optimal data room pricing model.