To determine whether you should consider Dropbox to be a data room type, you first need to know what a data room is.

Conventionally, data rooms were secure physical spaces where people would store information of different nature. With advancements in technology, these rooms are now cloud spaces where you can store and share confidential information.

In that case, Dropbox, in some aspects, is similar to a data room. By using it, you can easily store, sync, and share files across various devices. However, its primary goal was to simplify 

the sharing of files for customers.

Who uses Dropbox?

Prolific users of data rooms include companies, legal teams, auditors, and investors that use them for essential and critical processes that involve fundraising, audits, tenders, and legal transactions.

The purpose of Dropbox

It is entirely different from that of data rooms. When you want to share public information such as photos or documents with a team of colleges or a group of friends, Dropbox may work fine for you as you only send the link to those with whom you’d like to see the information.

However, when you think about sensitive or critical information and don’t want to risk it landing in the wrong hands, a data room would be much more suitable. That is because data rooms can track who has access to the given information to prevent privacy breaches.

Gaining access to Dropbox

To gain access to any information on Dropbox, all you need is an authorized link without any elaborate permission structures. The data you share is in protection mode while in the transfer process. But once the recipient gets the information on the other end, no more security measures are in place.

On the other hand, security is paramount when it comes to data rooms. Even after you share a file, you’ll need to apply verification protocols to access it, track it, and all enforcing permissions.

Organization and control of information

Another critical difference between Dropbox and data rooms is how they organize and control information. In Dropbox, it is possible to create a folder and allow others access to it.

However, you can create multiple folders and groups for a data room to help control access to various files. Hence, this is especially helpful for businesses and organizations since you can restrict information to its respective department.

Final verdict: Is Dropbox a data room or not?

Considering all the data room features, Dropbox does not meet the essential data room security checklist. Although the exact characteristics of a data room will vary depending on the tool’s provider, Dropbox still offers the bare minimum, especially on the issue of security. Hence, that platform allows you to share and store files while integrating other third-party services.

For a data room, once you create a data room, a dedicated team will help you manage it. You cannot integrate other third-party services since the data room service provider comes pre-packed with several functions that they can deliver.

Besides that, data rooms allow you to organize files according to your needs while maintaining extremely high-security measures. If you are only concerned about sharing files securely, Dropbox is great.