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.