In fact, the title of this post is an understatement of the true situation in Malaysia. According to a survey of 550 Small and Medium Businesses (SMBs) conducted by AMI-Partners recently, only slightly more than 1 in 3 SMBs are aware of or believe in using a virtual private network (VPN).

The Technology

For those unfamiliar with the technology, a VPN is a private communications network used within a company or between multiple companies over a public network. In most countries, it is the most popular means for a business’ staff outside the office to communicate with computers inside the office (e.g. mail servers, project documents, etc.).

Why the Lack of Adoption?

So, why aren’t SMBs adopting the technology? For one, any implementation of a VPN implies that the company in question already has a corporate intranet - with the prerequisite servers, routers and personal computers. Not only do many small companies lack the operational budget for such expenditures, quite a number actually lack the incentive to push for more tech. Moreover, it should be rather obvious that not that many SMBs require the extended geographic connectivity or rather, secure connectivtiy afforded by VPNs.

Good or Bad?

So, is this lack of adoption of VPN technology by SMBs good or bad? Well, on the one hand, we are looking at a lack of tech savvyness among the institutions that have been labeled as “one of the best bets for Malaysian economic growth” - which further lead to the various security disadvantages of non-VPN intra-company communications from outside the office. It also goes without saying that the lack of IT security spending among SMBs is not a good indicator for our local IT security market.

But given the recent emergence of various web applications providing intra-company, or intra-group communication and collaboration services, the lack of adoption of VPN technology among small or to a certain extent, mid-size businesses which would rarely even utilize a corporate intranet to its fullest, may not be a problem at all. Look, for example, to the hit Web 2.0 services produced by 37 Signals such as Basecamp for intra-company project management and collaboration, Backpack for information organisation, or Campfire for intra-company chat sessions.

These web services are, by comparison, to a full-scale VPN, much, much cheaper, and often, equally secure with sufficient security awareness and appropriate software installed on the computers used (especially since VPNs tend to be insecure when implemented superficially).

The question is: Will SMBs take an even higher-tech road in being the early adopters of such web services in order to reap the advantages of secure and effective intra-business collaboration and communication on the cheap? After all, getting SMBs aware of VPN was tough enough - to say the least.

Thus, if you look at the lack of adoption of VPN technology among SMBs as a matter of a lack of need, then our new-fangled web services will not change the (currently discouraging) situation, nor will anything except government incentives for that matter. But if you look at it as a matter of cost effectiveness, then there is a possibility that the lack of adoption of VPN technology can be used as a platform towards pushing SMBs to cheap and effective web services which provide faster ROI (Return on Investment) - especially for small businesses which cannot possibily be expected to utilise a VPN (and the prerequisite) hardware to its fullest.

Conclusion

I would like to think that we are looking at a point where SMBs can become the catalyst towards the development of a Malaysian web services market - one filled with vibrant startups not unlike how 37 Signals once was in the US. But it is far more likely that the lack of adoption of VPN technology among SMBs at the moment is nothing more than a lack of awareness and relatively high costs of hardware as a fraction of operational expenditure for SMBs in a developing nation. This is, of course, a Bad Thing, but as analysts at AMI-Partners have noted, it is entirely likely that within the next 5 years, small businesses will account for a large proportion of Malaysia’s IT security spending.

So, thank you for reading what has become little more than a short and most likely, irrelevant rant; a divergence from a question that could easily have been answered in 200 words (or less). Hopefully though, it has managed to provide some sort of background on VPN technology and the potential of the latest web services, as well as spark thought on developing a proper web services market in Malaysia. No, Lelong does not count.

You would think that the revamping of Malaysian Airlines (MAS) would entail truly drastic measures, in line at least with the modern economic forces at play against conventional airlines. But the excerpts from the recent Q&A session chaired by MAS managing director Idris Jala proved otherwise.

We’re actually considering staff salary raises of 3% to 3.5% (when MAS returns to profitability), at a time when MAS’ recovery isn’t even assured. A morale booster maybe, but a temporary one. I like to think that a profitable MAS would be the only way anyone can recover any sort of confidence with one of our national assets.

Now, RM2 billion probably isn’t that much of an injection for the Government. After all, we only built KLCC with RM1.8 billion in 1998. But it would have been nice to see something other than this response, “I prefer not to dwell on the past but to focus on, from here on, how we can make the airline profitable…” when asked about the alleged mismanagement and abuse of privileges in MAS. It’s probably a correct response, but only because profitabiliy would be an impossible aim otherwise.

In any case, we have, at the very least, a turnaround plan for MAS in place. That’s an important first step. Hopefully, we’ll see MAS returning to the black, the same way Proton did after losses in the first and second quarters of the fiscal year of 2005.

You can take it both ways. But whether it is this post on Malaysian Airlines (MAS) that is old news, or MAS - the airline - itself, the facts remain: MAS is on a downhill path. A net loss of RM367.7 million in the second quarter (Q2) of 2005 is not the problem. It merely underscores the pervasive problems MAS is suffering from.

But patriotism tends to blur the facts. Some have pointed to AirAsia as part of MAS’ woes, claiming that the low cost carrier does “…affect the business of the scheduled airlines unless the scheduled carrier is a fully international airline like Singapore Airlines.” Well, it would be difficult to deny that low cost carriers pose a significant challenge to large, bulky and lumbering airlines like MAS, but the real reasons for that must be made clear. AirAsia is just more cost and price-competitive. MAS just lacks proper management. Period.

Of course, we are given reason to hope. On Feb. 9, it was announced that Malaysia Airlines’ “comprehensive business turnaround plan” will be out to fry on Feb 27. Apparently, we’ll be looking at “…several elements to ensure the airline’s cashflow survival, profit turnaround and human resource development.”

Now, let’s hope that the word “turnaround” wasn’t being used lightly (or worse still, sarcastically). After all, there’s still another five days to the miracle announcement that will salvage our dreams for a self-sustaining national carrier. That’s more than enough time for hope to build up - enough hope to destroy whatever confidence that we have left for the future of one of our most favoured national assets.