The answer is that a few vendors had a head start in this market beginning in the early 2000’s which probably lasted for ~10 years before other companies developed competing platforms. This gave them extra time to study the behavior of VDR buyers and perfect their sales messaging while building their respective brands.
For example, vendors are able to exploit the fact that no one wants to be blamed if something goes wrong on a deal because they chose a less expensive VDR. As such, vendors tell Corp Dev, General Counsel, CFO’s etc. they could be putting their jobs on the line if documents are exposed to the wrong parties or if access is impacted by a cyber incident.
Additionally, vendors know most professionals may purchase a VDR only a handful of times and will avoid researching and shopping for a VDR. That sentiment coupled with the fact that the expense of a VDR is buried in a list of other transaction related expenses creates a breeding ground for inflated pricing.
The good news is there are many lower cost VDR options in the market now with very viable solutions. Notably, some provide excellent end user experiences and pass along the benefit of essentially free storage to their customers.
Lastly, as it relates to security, most VDR solutions are highly secure by virtue of the fact their apps run in modern clouds like AWS, Azure, and Google Cloud with security, backup and redundancy already included.
My goal in writing this post is not to suggest that every company consider switching to less expensive VDR providers, though in some instances that may make sense. Instead, consider calling a VDR consultant to help you win more optimal terms from whichever vendor you prefer.
