16 April 2026

Dropbox for design drawings, OneDrive for contracts and WhatsApp for research data? That may be all well and good for private use but can quickly turn into a security nightmare, states netfiles.

Anyone sharing sensitive company data via popular American cloud services is throwing the gates wide open to hackers and competitors, says netfiles, the German provider of data rooms. In this article, the company sets out to show a better and more secure way: the virtual data room.

A development engineer sharing design drawings with his supplier in Asia. A lawyer sending contractual documents to her clients. A research team coordinating study findings with partners abroad. Business as usual at German companies, every day. Yet all too often, these confidential documents end up on unsuitable (read: insecure) platforms – or even as attachments to unencrypted e-mails.

People have become accustomed to this practice because it is fast and uncomplicated. The tools are familiar and easy to handle. Yet convenience has its price, tempting users of these services to ignore legal and security considerations. Worse, the consequences are very serious: Confidential design drawings, strategy papers and/or customer data spin out of control as soon as they are shared via such channels. In stark contrast, virtual data rooms provide the greatest possible security. netfiles highlights five aspects that explain why this is so:

1. Leading-edge security technologies guard against cyber-criminals and industrial espionage

Consumer filesharing services are intended primarily for private users. But their security architecture can never satisfy the needs of the corporate sector. Compromised access data, for example, lets hackers target accounts to copy or tamper with sensitive material or mission-critical data. And no one notices! Even state actors operate in such spheres, deliberately spying on trade secrets to make them available to their own domestic companies. The bill for corporate players can be very expensive. Nor is money the only consideration: If any such incident comes to public attention, the trust of partners and customers – cultivated over many years – can suffer badly.

In contrast, a virtual data room uses leading-edge security technologies for data encryption, authentication and access control. All data transmission uses SSL/TSL encryption, for example. Data is then stored using the Advanced Encryption Standard (AES-256) encryption algorithm, while passkeys and 2-factor authentication can be activated to protect login procedures, if required.

2. German and European data rooms are GDPR-compliant

The General Data Protection Regulation (GDPR) compels companies to store personal data securely – ideally at a location within the EU. However, many data exchange platforms store data on US or Asian servers, in blatant violation of GDPR provisions.

GDPR violations lead to fines of up to 20 million euros or 4% of annual turnover. In addition, regulated professions such as banks, doctors and lawyers risk losing their license to operate. Worse still, insurers often refuse to cover losses resulting from data protection violations. Companies then have to foot the bill themselves, but also risk losing the trust of their customers. Yet all these risks can be avoided simply by using a German or European virtual data room that complies fully with the EU's strict data protection provisions.

3. ISO and BSI certifications add further security

Specialised providers of virtual data rooms deliver secure, turnkey SaaS solutions for data exchange and collaboration. User companies should nevertheless make sure that their provider is suitably accredited – in line with ISO/IEC 27001 and SOC 2, for instance – and that it possesses the C5 certification awarded by Germany's Federal Office for Information Security (BSI). Such data rooms satisfy all GDPR requirements and meet the highest standards of security.

It is advisable to choose a purely German provider such as netfiles, which stores data exclusively at certified, highly secure data centers in Germany. Since there is absolutely no recourse to foreign parent companies, confidential data is safely protected from influence by and access from foreign government agencies and/or foreign jurisdictions such as the US CLOUD Act. This conscious choice marks an important step toward genuine digital sovereignty.

4. Audit trails document each and every access

At any given time, a company needs to be able to know who has accessed and/or edited what files. Where conventional cloud services are used, this is not normally the case. This lack of an audit trail prevents the resolution of security incidents and makes it more difficult to comply with prescribed retention periods. It also makes it impossible to detect unauthorized accesses in good time.

Not so in a virtual data room, where granular rights determine who can view, edit and/or download what documents. Automated versioning guarantees seamless transparency about all changes, while audit trails reliably document every single access.

5. Convenient teamwork

In a data room, projects involving internal and external team members alike can be set up very quickly. Colleagues and external partners can be invited by e-mail. The advantage? Everyone always accesses the same up-to-date information – quickly, easily and securely.

• Upload: Project materials – be they individual files or whole folder structures – can simply be dragged from a desktop and dropped into the data room. The administrator can define who is allowed to read, edit and/or download each folder and each file individually.
• Notifications: Whenever someone on the team uploads new files, the project leader can be notified by e-mail. They can open files in the browser, check them or immediately make any necessary edits – even while on the move. Someone else on the team can even be working on the same file at the same time. Both see each other's changes in real time.
• Access control: Before a document is released for project use, the project leader can check which team members have already viewed it. The audit log shows exactly who has done what and when. If someone has not yet opened the document, they will receive a reminder straight from the data room. The whole team thus remains perfectly synchronized before the project moves on to the next phase.
• Convenience: Everything works intuitively and in a familiar way, but with far greater security. A virtual data room thus combines a convenient way of working with secure data exchange.

Switching to a virtual data room

In theory, anyone can build their own platform for secure data exchange. In practice, however, a huge amount of work is involved. Suitable servers are needed, as is a sophisticated security architecture complete with encryption mechanisms, an authorization concept and audit functions. Then there is the issue of updates, patches and security checks during ongoing operation. The resources devoted to these tasks are, of course, then missing from a company's core business.

The far easier option is to switch from popular American cloud services to a professional virtual data room. Existing folder structures can be uploaded quickly and easily, and all users can be created at one go simply by importing an Excel spreadsheet. As a rule, users can immediately start working efficiently with a data room such as netfiles. There is no need for training and no learning curve.

Bottom line: Secure data exchange with no compromises

A professional virtual data room is tailored specially to the needs of companies. It combines secure data storage with precise access controls and seamless documentation of all activities. As a result, companies remain in full control of their data at all times. A virtual data room also combines legal certainty with data protection – simply, efficiently and sustainably.