InSite by Paul Hartzell, Senior Vice President, Merrill DataSite®
Grocers have known about this little trick for a long time: they put a cheap, irresistible price on some special to get shoppers in the door—all the while knowing that they’ll make up for that loss-leader by overcharging on the rest of the groceries.
A number of virtual data room providers out there today are playing this same game. These VDRs dangle a low initial price in front of potential clients while planning all along to make their money through hidden fees and service charges on the back end. In fact, the FINAL cost to you can vary by as much as 100 percent from that initial bid.
Let’s talk about why that happens and how to keep it from happening to you.
While one VDR may look the same as another in an online demonstration, they’re not. In fact, with the help of some subtle, hidden tricks, certain VDR providers may be misleading you from the beginning.
To avoid being fooled, first make sure you are seeing a live demonstration. This can be quickly verified by asking the presenter to start from a known live page with current news or business topics. Perhaps that could be your company’s home page. Then, watch the presenter type in the URL of the demonstration site. You MIGHT be watching them direct the demonstration to a non-production server but at least you won’t be watching a demonstration on a hard drive.
Here’s another tip: Make the provider come to YOUR office and log in on YOUR equipment inside YOUR firewall. You will eliminate up to 70 percent of the VDR providers out there today by making this simple request.
And you should never rely on pricing that states file size is the metric which determines cost. It’s tempting to sometimes rely on this because it’s a common way for IT professionals to buy storage and related services. However, it’s a very misleading way to pay for software as a service that involves documents. Why? Because depending on the resolution and presentation of the pages, the ability to search the pages and any color or graphics on the pages, the SAME document can be 15 to 30 times larger from one file to the next for exactly the same content. Don’t make this mistake!
What should determine your cost is something easily counted – pages loaded to the site. It’s not just about the marginal cost of the last page or block of pages either. Make sure you understand that many VDR providers force you to pay a large minimum by disguising it as the first block of pages. Ask them to explain what the cost is if your project has half of the number of pages as the first block of pages. Otherwise, when you get the invoice for what you thought was a smaller project than you first envisioned, you’ll be surprised that your cost per page has doubled.
Here’s a second tip: Don’t buy blocks of pages. Buy one page at a time.
Once you establish a market price for the number of pages you expect to have, make sure you get a cost for additional pages should your business situation dictate a larger page count. That often happens and at Merrill DataSite, our average project size in 2010 is more than 23,000 pages.
But the real driver of a well-managed VDR project is going to be what you pay for the “extra services” that no one wants to talk about—which you will find detailed in the actual service agreement.
What are those extra services? The most common are “out of scope” charges, charges which occur after a certain time of the day, charges for additional copies or “views” of the user activity on the site created for a DVD, and finally, charges for additional months of use.
“Out of scope” charges appear in many forms but the most common occur when you ask the VDR provider to actually do some or all of the work in helping you build your site. Converting different file types to PDFs, renaming files, moving documents to other folders or helping set security on documents are the most common tasks for which you’ll be charged. You will pay for this help in “blocks” of four hours even if your request takes only a few minutes. Those blocks can cost anywhere from $1,500 to $2,500 or as much at $200 per hour to have one person help. That hardly seems like good customer service to us at Merrill DataSite.
The second most common additional charge is when you need to call someone after a certain hour of the day. Many VDR providers talk about 24/7/365 availability, but read the not-so-fine print. Those providers have “normal hours” and then they have “other hours.” You will pay dearly if you need help during those additional hours—and you may pay for a “block” of four hours for ONE phone call made after 6 p.m. on a Friday. That hardly seems like good customer service to us at Merrill DataSite.
The third most common additional charge is when you require additional days or months of VDR access beyond the original term of the agreement. Be careful that you are not being charged a fraction or a percentage of the total bill to date. If you have a 6-month initial term, you are going to be paying 1/6th of the TOTAL amount you have paid to date to run the VDR for Month 7. That is three to five times MORE than you should pay.
Here’s a third tip: For your additional months, you should simply pay a per-page rate that’s not dependent on what you have spent to date. It should be simple and easy to calculate how many pages you have on the site from the dashboard of your project. If you don’t see that, you’ve bought the wrong VDR!
Finally, the closing of every deal needs multiple copies of EVERYONE’s activity on the site during the transaction. Platforms with limited capability must create “views” by just one user as defined by that person’s email address. To create a complete record of multiple users from one firm or of all users on a project takes multiple “views” and the cost of each view ranges from $500 to $1,500. The final insult is the CD containing that “view” may take as many as 30 days to produce! That hardly seems like good customer service to us at Merrill DataSite.
So, what does all this mean? It can easily mean that if you are not clear about how these additional charges will accumulate, you will pay up to twice as much for another VDR provider as you would have paid by using Merrill DataSite, with our simple, all-inclusive per-page price. We have NO charges for “out of scope” activity. We do what you need, when you need it and NEVER charge extra. We have NO additional charges for work done at any hour of any day of the week. We work when you work and we don’t charge extra for it.
Finally, we have NO charges for the page level history of EVERY participant during the life of your project. We include multiple no-charge copies and additional copies are $50 at the most. We produce them in minutes or you can create your own report and export it to Microsoft® Excel® in seconds. There is NEVER an additional charge for this with DataSite.
I hope this will give you some additional InSite into the pricing variables of other providers in the VDR industry and further clarification of why Merrill DataSite, with simple per-page, all-inclusive pricing, is the best value for money worldwide today.
