Virtual data room pricing is a fundamental matter; businesses and professionals need to know how data room vendors charge for their services, what are common data room pricing models, and which one suits your business the most.
It is important to know that VDR pricing has been somewhat of a controversial matter as few vendors in the past were charging hidden fees that were negligible for large businesses but a great deal for small and medium entities.
In this, you will be able to learn about the following:
- Globally used VDR pricing models
- Average virtual data room usage cost
- How to choose the right data room pricing model for your business
How much do virtual data rooms cost in 2023?
Online data room software usage has extended to a wide range of industries. Different business sectors use data room software for different purposes. Thus, the expense varies greatly. For example, the cost of VDRs in mergers and acquisitions will depend on the size of the transaction. Similarly, if a company uses data room services for regular data maintenance, the cost will be different.
It also depends on the pricing model which a business chooses. For example, the average data room cost of an M&A transaction is between $20,000 to $40,000 if the services have been rendered based on per-page pricing models. There are cases when the net VDR cost in M&As reaches $100,000.
Therefore, it is hard to ascertain how much electronic data room usage will cost in 2023. Still, you can expect to pay between $500 a month to $10,000 or more, depending on the size of your organization or the nature of usage.
Common virtual data room pricing structures
“A detailed pricing analysis must be a mandatory part of your data room review. Users with insufficient knowledge about pricing models may end up paying more than they should, which isn’t cost-effective at all“, says Terry Snyder, Co-Founder of an expert data room review and comparison platform.
Generally, data rooms offer the following virtual data room pricing structures for their services:
- Per user
- Per storage
- Flat monthly fee
Let’s uncover the pros and cons of each.
Per-page pricing is a bit of old-fashioned pricing practice in the VDR industry but is still common. As the name suggests, vendors will charge based on every page uploaded in the VDR (it is important to note that you will be charged per page, not per document).
Per-page pricing model may cost you between $0.40 to $1 per page.
When to use per-page pricing
Per-page pricing is relatively expensive when it comes to long-term usage or dealmaking, such as mergers and acquisitions, fundraising, etc. It is best suitable for small-scale data sharing, such as joint business operations, partnerships, and time-based projects.
Many virtual data room providers charge you on the basis of the total number of users in the data room. Generally, the vendors specify the number of user licenses in a given package, and additional users are charged extra.
For instance, there are ten user licenses in a given package at a fixed price. If the company wants to add an additional user, it will have to pay an extra amount. Per user pricing model may cost you between $100 to $250 per administrative user and between $15 and $25 per general user.
When to use per-user pricing
Per user pricing model is highly suitable for small-sized firms such as law firms, freelancers, independent business teams, audit firms, etc. Internal teams can also use VDR services based on per-user pricing models. Moreover, per-user pricing is also suitable for board members or board teams.
Data room vendors also charge their customers based on the total data storage space consumed. Generally, users have to pay for every GB (gigabyte) they consume to store data. Furthermore, vendors also allow a maximum limit of data consumption in a given package, and anything above that is charged additionally. On average, you can expect to pay $75/GB.
When to use storage size pricing
Just like the pricing models mentioned above, this one is also suitable for small-scale projects where you don’t have to deal with a massive amount of data. It is preferable for small teams and businesses.
Flat monthly fee
It is arguably the most common virtual data room pricing model in the modern-day VDR market. In this pricing mechanism, companies allow businesses to add a specific number of users and consume limited data storage space based on the chosen package. Users can ask for additional services by paying extra. On average, this pricing model may cost you $500 to $2000 a month (depending on your usage).
When to use the flat monthly fee model
The flat monthly fee model is highly recommended for long-term or regular use. For example, companies going public can use this pricing structure as the IPO may continue for weeks or even months.
Apart from that, vendors also offer yearly subscriptions that are beneficial for long-term usage.
Every data room review should include a detailed analysis of virtual data room pricing. It helps you determine which pricing model will be suitable and cost-effective for your business or personal use.
While per-page, per-user, and per storage pricing have their benefits, it is always safer to go for a flat monthly fee subscription, as it offers the most transparent pricing model and the best cost-to-quality ratio.