NASDAQ enters virtual data room space

Managing the sharing of documents across a corporation and beyond can be taxing for corporate secretaries and the general counsel’s office. Virtual data rooms, which eliminate the need for physical security, scheduling visits to view documents and other logistical and costly issues, have made document sharing much easier over the past decade.

Seeing an opportunity in the $628 million industry, NASDAQ OMX Group has jumped into the ring with a new product called WorkSpace, which launched on May 6. 

The cloud-based product protects sensitive, proprietary information, both within and outside an organization’s firewall. It is intended to build on what NASDAQ learned with Directors Desk, a board portal product it acquired in 2007 that facilitates board communications and helps corporate secretaries save time and paperwork in running board meetings and keeping boards informed.  

'Directors Desk is already in a secured space, particularly targeted to the management team,’ says Demetrios Skalkotos, head of corporate solutions at NASDAQ. ‘We’ve seen that product grow fast organically since the iPad came to fruition. Our clients asked us to walk down the hall and modify or advance our application for another addressable market.’

Revenues for virtual data rooms are projected to grow at an annual rate of nearly 15 percent to reach $1.3 billion in 2017, fueled by ongoing M&A as well as venture capital, private equity and hedge fund activity, according to an IBISWorld industry report published in January 2012.

WorkSpace is seen as a key component of NASDAQ’s next generation product set, which will help synchronize workflow to enable greater collaboration, says Skalkotos. It fits in with NASDAQ’s anticipated acquisition of Thomson Reuters’ corporate services business, which includes investor relations, public relations and multimedia solutions. That transaction is expected to close in the next couple of months.  

With Thomson’s business, ‘we’ll have a larger existing client base to talk to about this,’ he says. ‘We’re definitely seeing companies, corporates as well as capital markets, wanting to reduce their vendor footprint by getting the same company to do PR and marketing announcements and provide workflow [platforms] that link the PR, IR and corporate secretary communities.’

With more than 200 providers already in the industry, it’s fair to wonder whether WorkSpace offers anything new or unique. Skalkotos cites its auditing and tracking functions that allow users to assign, annotate and report on documents. Mobile capabilities will let users access the product on their tablet of choice and is specifically designed for people on the go, he adds. Its main competitors are Intralinks and Merrill DataSite.

Cyber-security is a key concern for virtual data room providers and their clients due to the highly confidential nature of the information involved in mergers and acquisitions, pre-IPO due diligence reviews, bankruptcies and restructurings, audits and fundraising initiatives that the document-sharing technology makes easier. 

‘We’re taking security very seriously,’ says Skalkotos. ‘We have a scrambled pin pad in our log-in capabilities, and we have a secure viewer which provides control over document security down to user device level.’