Friday, March 11, 2011

Prices of a VPN-service

Hillary Clinton speaking at a rally in support...Hillary Clinton via Wikipedia
Mostly I hate to give free business advice, but as it comes to VPN-services - Hillary Clinton will agree - there is more at stake than the money you can make with it. VPN-services, for the people who wonder what that might be, are online channels who help you in China to circumvent the internet censorship.

There are a load of free VPN services around, like you can see a selection here, but when you really depend on your online communication, it makes sense to pay a few bucks so you do not have to bother about whatever China's censors might think is offlimits.

In the past I worked with Witopia, and they did an excellent job. Last December I switched to 12vpn, for a simple reason: they were cheaper and the reviews of this relative new service were excellent. I then paid US§ 35 for a one year. That was only a difference of less than US§ 5, but as everybody who spent some time in China: you are not even going to spend one cent on something called loyalty. Loyalty schemes are invented by overpaid MBA's (I know them), who have to justify their salaries. They do not add any real value.

12VPN did a really good job, and I was happy to transfer it to a good friend when I left Shanghai in January.

Just now I got a tweet (h/t @kinablog) telling me that 12vpn had increased their fee to US§ 129. The business reason behind it I do not know, but I guessed they must have hired recently an MBA. Nobody who can get Witopia for US§ 39.99 is going to take them serious.

The problem of this pricing strategy is of course that the average internet user in China cannot afford even Witopia. If Hillary Clinton is going to offer this open channel for free (long time ago before 9/11 the CIA offered actually such a service) the whole industry will be flat out. But otherwise, what do you think of this idea? You would have to look into the political and technical ramifications if you going to offer an affordable VPN-service to all 450 million, it should be down to US§ 2, and perhaps you have to organize localized distribution systems for students who can earn an additional buck for their effort. That would be fun.

For a long time Chinese internet users were not really interesting in those VPN-services, since they were pretty happy with the censored edition of the internet they could get. I see some signals showing that the need for a cheap VPN-service might be growing, so you might not have a customer base of 450 million, but with a couple of millions it would also be feasible.

What do you think?
(Earlier published at www.fonstuinstra.net)
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