For two decades, virtual data rooms have been the spine of due diligence. In 2025 the stakes are higher. Deal teams manage hybrid work, heavier regulation, and AI‑driven workflows. The result is pressure on long‑standing VDR brands to modernise without losing the reliability that made them category leaders.
This article explains how incumbents are evolving, where they still lead, and what buyers should test before renewing licences.
Why the market is moving now
Several forces are pushing upgrades and re‑platforming:
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Regulatory clarity: The EU’s AI Act sets governance expectations for AI features inside enterprise tools. That affects audit trails, explainability, and vendor oversight.
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Risk economics: The 2025 IBM Cost of a Data Breach study shows breach costs remain material. Boards ask how collaboration systems reduce exposure and speed incident response. Source: https://www.ibm.com/reports/data-breach.
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Deal practice shifts: Bain’s 2025 M&A analysis points to buyers using analytics earlier, running more targeted processes, and demanding cleaner separation in carve‑outs. Reference: https://www.bain.com/insights/topics/m-and-a-report/.
How traditional VDR giants are adapting
1) Secure AI that respects governance
Modern platforms add summarisation, document classification, and Q&A suggestions. The change in 2025 is tighter control: tenant‑level AI toggles, data‑processing isolation, and exportable logs for every inference. Buyers expect clear statements that customer content is not used to train global models. They also look for human‑in‑the‑loop review on sensitive prompts.
2) Stronger identity controls
Single sign‑on through the customer’s identity provider is now standard. Leaders add conditional access, step‑up MFA for privileged actions, and device posture checks. Granular session controls help prevent silent data exfiltration when external advisers join late in the process.
3) Evidence‑ready compliance
Incumbents ship organised evidence packs for NIS2, ISO 27001, SOC 2, and GDPR. Expect mapped policies, incident playbooks, tested disaster‑recovery summaries, and sub‑processor lists. The best vendors present these in audit‑friendly formats rather than scattered PDFs.
4) Data‑residency and jurisdiction options
Buyers want EU‑only storage, regional disaster recovery, and service routes that avoid unnecessary cross‑border support access. Giants now offer selectable regions and clearer key‑management documentation so legal teams can sign off faster.
5) Workflow depth, not just file vaults
VDRs have moved beyond storage. Boards and deal leads ask for structured Q&A, redaction at scale, clause‑level search, request lists that sync with diligence trackers, and clean handover into integration teams. Incumbents are building native bridges or APIs rather than leaving users to spreadsheets.
6) Performance for heavy diligence
Multi‑TB uploads, instant watermarking, rapid thumbnailing, and fast search across scans are table stakes. Legacy players are refactoring pipelines and adopting GPU‑assisted OCR to keep review speeds high during peak activity.
Where incumbents still lead
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Reliability at scale: Years of traffic from major deals matter. Uptime history, proven incident response, and predictable support still differentiate.
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Global service coverage: 24/7 multilingual support and trained project managers keep complex processes moving across time zones.
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Security certifications and attestations: Mature audit programmes reduce legal redlines and insurer queries.
Where challengers are catching up
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Pricing transparency: Newer entrants bundle AI and analytics cleanly. They publish simpler SKUs and lower overage fees. Giants are responding with clearer tiers and usage dashboards.
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User experience: Startups deliver lighter, mobile‑first UIs. Incumbents answer with redesigned navigation, fewer clicks for permissions, and better accessibility.
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Vertical focus: Specialists ship templates for life sciences, renewable energy, or infrastructure. Established brands counter with industry solution packs rather than generic workspaces.
Buyer checklist for 2025
Use this short list when testing platforms:
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AI guardrails – Can you disable AI by workspace or group? Are prompts and outputs logged and exportable? Does any model training use your data?
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Identity and access – Native SSO, conditional access, just‑in‑time provisioning, and enforced MFA for admins. Support for external users without IT tickets.
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Data residency – Clear primary and failover regions, backup locations, and sub‑processor maps. Documented controls for support access.
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Auditability – Immutable audit trails, investigator views, and retention options that satisfy internal control testing.
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Performance at load – Timed tests for upload, OCR, search, and bulk permission changes with a large, realistic dataset.
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Workflow fit – Q&A flows, request lists, role templates, and archive exports that match your diligence method. Integrations into deal CRM or post‑merger integration tools.
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Evidence packs – A single, current bundle for ISO/NIS2/SOC 2 plus incident‑reporting SLAs and recent DR test results.
Practical use cases shaping design
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Sell‑side readiness – AI‑assisted classification and templated request lists help teams prepare earlier and shorten the question cycle.
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Carve‑outs – Workspace structures that separate “clean team” data, with scripted redaction and compartmentalised access for bidders.
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Board oversight – Secure board‑pack distribution, conflict‑of‑interest workflows, and meeting archives in the same controlled environment.
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Financing rounds – Repeatable spaces with role‑based permissions for lenders and rating agencies, plus automated watermarking and NDA tracking.
How to benchmark a traditional provider
If you are evaluating a long‑time market leader, run a pilot that reflects your busiest month, not a demo day:
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Import a heavy folder tree with mixed PDFs and scans; measure upload, OCR, and search times.
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Reproduce your permission model, including external counsel and bidder groups.
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Trigger a mock incident and review notifications, log quality, and response coordination.
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Export an audit trail and hand it to internal audit for review.
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Compare ownership costs over a year, including storage overages and support fees.
For a balanced view, many teams pair a giant’s proposal with an analysis or a Datasite review to check how feature depth and service model align to current workflows.
Outlook: what comes next
Expect VDRs to act more like governed collaboration layers than standalone vaults. The near‑term roadmap across the industry points to:
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Policy‑aware AI that honours access controls and redaction rules.
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Deeper integrations into source‑of‑truth systems for finance, contracts, and governance.
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Clearer service‑level guarantees tied to audit evidence, not marketing claims.
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Smoother handoffs from deal to integration, with structured exports that feed PMI tools.
Incumbents can lead this next phase if they keep the trust they earned and ship modern controls without complexity. Buyers should insist on evidence, test with real workloads, and choose the platform that reduces risk while speeding decisions.