This paper presents the results of empirical research conducted during March to September 2009. The study focused on the influence of virtual research and development (R&D) teams within Malaysian manufacturing small and medium sized enterprises (SMEs). The specific objective of the study is better understanding of the application of collaborative technologies in business, to find the effective factors to assist SMEs to remain competitive in the future. The paper stresses to find an answer for a question “Is there any relationship between company size, Internet connection facility and virtuality?” The survey data shows SMEs are now technologically capable of performing the virtual collaborative team, but the infrastructure usage is less. SMEs now have the necessary technology to begin the implementation process of collaboration tools to reduce research and development (R&D) time, costs and increase productivity. So, the manager of R&D should take the potentials of virtual teams into account.