Why MFT and VDRs Are Failing the Digital Workplace
When Old Tools Meet New Workflows
Before Microsoft 365 (M365), managed File Transfer (MFT) and Virtual Data Rooms (VDRs) were the gold standard for secure file sharing between external parties. They worked well for what they were designed to do: bulk transfers of sensitive information to enable high-stakes transactions like mergers or litigation.
But M365’s digital workplace is the unified business platform we’ve been waiting for. Collaboration is now continuous, iterative, and core to every business process. Teams co-author documents in real time, share updates daily, and expect seamless integration with applications.
Here’s the problem: MFT and VDRs weren’t built for this new world. Forcing modern workflows into legacy tools doesn’t just slow people down—it creates governance gaps that enterprises can’t afford.
Are MFT/VDRs The Right Choice for Secure Collaboration in M365?
Short answer: No. With M365 the entire data lifecycle can now be controlled within tenant without exposing the data or requiring guest accounts. Using the principles of Zero Trust and least privilege enforcement, M365 eliminates the need for an MFT or VDR whether it’s for a one-off, high-security exchanges, or the daily collaborations that drive most projects.
Why are MFT’s and VDR’s unnecessary in M365?
➙ They require data to leave Microsoft 365. Uploading to a VDR or MFT system creates uncontrolled duplicates. Less control, more complexity, and much more risk.
➙ They slow down business. No real-time co-authoring, no Teams or Outlook integration. Offline edits and re-uploads create version chaos.
➙ They create frustration. Extra logins and portals push employees to bypass controls—often reverting to email attachments or shadow IT.
The result? CIOs and CISOs think theyhave a secure business platform, while business units quietly move back to unsanctioned workflows.
The Governance Gap Nobody Talks About
When files leave Microsoft 365, enterprises give their data away forever:
☒ No M365 security MFA, Conditional Access, Purview labels, and DLP don’t apply once files are outside the tenant.
☒ No oversight. Multiple copies fragment logs and retention.
☒ No functional AI. Copilot and other agentic tools can’t reason over data outside the tenant.
Every external copy is a compliance liability, productivity tax, and limits M365’s ROI.
What Does “Inherent Governance” Look Like?
An inherent governance model leverages M365 to flip the script:
☑ Keeps data in-tenant. Share directly from OneDrive or SharePoint—no third-party storage, encryption, or data loss.
☑ Enforces file-level Zero Trust controls. Microsoft Information Protection (MIP) labels govern view/edit/download, expiry, and watermarking.
☑ Enables BYOI (Bring Your Own Identity). Partners use their own credentials—no guest sprawl in Entra ID.
☑ Integrates with daily tools. Teams, Outlook, and SharePoint remain the center of work.
eSHARE is leading this shift towards inherent governance. By weaving advanced governance directly inside Microsoft 365, eSHARE enables enterprises to keep sensitive data in-tenant, enforce file-level policy, and maintain seamless collaboration—all without guest accounts or shadow IT.
The Business Case for Change
➙ Lower risk: No uncontrolled file copies, no guest accounts, continuous audit trails.
➙ Higher adoption: Users collaborate inside the apps they know—Teams, Outlook, SharePoint.
➙ Faster AI enablement: In-tenant governance clears the way for governed AI adoption.
That’s why Fortune 500 companies in aerospace, insurance, and financial services are turning to eSHARE’s inherent governancesolutionto enable modern collaboration in M365.
What CIOs and CISOs Should Do Next
➙ Map the current state. How much sharing happens outside Microsoft 365 today?
➙ Segment use cases. Keep MFT/VDRs for episodic, high-stakes deals; move everyday collaboration to governance-native platforms.
➙ Pilot a governance-native model. Start with one partner or business unit. Measure adoption, risk reduction, and user satisfaction.
Join the Conversation
Forward-looking enterprises are already moving beyond MFT and VDRs. eSHARE is helping global organizations adopt governance-native collaboration that keeps data secure inside Microsoft 365 while enabling frictionless external sharing.
Explore how your peers are making the transition at the Impact Leaders Hub. Contact the Hub today.
When Old Tools Meet New Workflows
Before Microsoft 365 (M365), managed File Transfer (MFT) and Virtual Data Rooms (VDRs) were the gold standard for secure file sharing between external parties. They worked well for what they were designed to do: bulk transfers of sensitive information to enable high-stakes transactions like mergers or litigation.
But M365’s digital workplace is the unified business platform we’ve been waiting for. Collaboration is now continuous, iterative, and core to every business process. Teams co-author documents in real time, share updates daily, and expect seamless integration with applications.
Here’s the problem: MFT and VDRs weren’t built for this new world. Forcing modern workflows into legacy tools doesn’t just slow people down—it creates governance gaps that enterprises can’t afford.
Are MFT/VDRs The Right Choice for Secure Collaboration in M365?
Short answer: No. With M365 the entire data lifecycle can now be controlled within tenant without exposing the data or requiring guest accounts. Using the principles of Zero Trust and least privilege enforcement, M365 eliminates the need for an MFT or VDR whether it’s for a one-off, high-security exchanges, or the daily collaborations that drive most projects.
Why are MFT’s and VDR’s unnecessary in M365?
➙ They require data to leave Microsoft 365. Uploading to a VDR or MFT system creates uncontrolled duplicates. Less control, more complexity, and much more risk.
➙ They slow down business. No real-time co-authoring, no Teams or Outlook integration. Offline edits and re-uploads create version chaos.
➙ They create frustration. Extra logins and portals push employees to bypass controls—often reverting to email attachments or shadow IT.
The result? CIOs and CISOs think theyhave a secure business platform, while business units quietly move back to unsanctioned workflows.
The Governance Gap Nobody Talks About
When files leave Microsoft 365, enterprises give their data away forever:
☒ No M365 security MFA, Conditional Access, Purview labels, and DLP don’t apply once files are outside the tenant.
☒ No oversight. Multiple copies fragment logs and retention.
☒ No functional AI. Copilot and other agentic tools can’t reason over data outside the tenant.
Every external copy is a compliance liability, productivity tax, and limits M365’s ROI.
What Does “Inherent Governance” Look Like?
An inherent governance model leverages M365 to flip the script:
☑ Keeps data in-tenant. Share directly from OneDrive or SharePoint—no third-party storage, encryption, or data loss.
☑ Enforces file-level Zero Trust controls. Microsoft Information Protection (MIP) labels govern view/edit/download, expiry, and watermarking.
☑ Enables BYOI (Bring Your Own Identity). Partners use their own credentials—no guest sprawl in Entra ID.
☑ Integrates with daily tools. Teams, Outlook, and SharePoint remain the center of work.
eSHARE is leading this shift towards inherent governance. By weaving advanced governance directly inside Microsoft 365, eSHARE enables enterprises to keep sensitive data in-tenant, enforce file-level policy, and maintain seamless collaboration—all without guest accounts or shadow IT.
The Business Case for Change
➙ Lower risk: No uncontrolled file copies, no guest accounts, continuous audit trails.
➙ Higher adoption: Users collaborate inside the apps they know—Teams, Outlook, SharePoint.
➙ Faster AI enablement: In-tenant governance clears the way for governed AI adoption.
That’s why Fortune 500 companies in aerospace, insurance, and financial services are turning to eSHARE’s inherent governancesolutionto enable modern collaboration in M365.
What CIOs and CISOs Should Do Next
➙ Map the current state. How much sharing happens outside Microsoft 365 today?
➙ Segment use cases. Keep MFT/VDRs for episodic, high-stakes deals; move everyday collaboration to governance-native platforms.
➙ Pilot a governance-native model. Start with one partner or business unit. Measure adoption, risk reduction, and user satisfaction.
Join the Conversation
Forward-looking enterprises are already moving beyond MFT and VDRs. eSHARE is helping global organizations adopt governance-native collaboration that keeps data secure inside Microsoft 365 while enabling frictionless external sharing.
Explore how your peers are making the transition at the Impact Leaders Hub. Contact the Hub today.
FAQ
How can CIOs ensure compliance and audit readiness in Microsoft 365?
Balancing collaboration speed with strong governance is the top challenge. Features like Teams/SharePoint external sharing can create oversharing and audit gaps if unmanaged. Pairing Microsoft Purview with a guest-less external collaboration layer like eSHARE keeps data in-tenant, applies existing controls, and gives CIOs/CISOs the visibility they need without slowing work.
What is the biggest Microsoft 365 governance challenge for CIOs and CISOs today?
Balancing collaboration speed with strong governance is the top challenge. Features like Teams/SharePoint external sharing can create oversharing and audit gaps if unmanaged. Pairing Microsoft Purview with a guest-less external collaboration layer like eSHARE keeps data in-tenant, applies existing controls, and gives CIOs/CISOs the visibility they need without slowing work.
How do organizations manage Microsoft 365 guest account sprawl?
Balancing collaboration speed with strong governance is the top challenge. Features like Teams/SharePoint external sharing can create oversharing and audit gaps if unmanaged. Pairing Microsoft Purview with a guest-less external collaboration layer like eSHARE keeps data in-tenant, applies existing controls, and gives CIOs/CISOs the visibility they need without slowing work.
