It's All Virtual

Source: San Francsisco Business Times

“A lot of Silicon Valley has written Second Life off.  The tech world will have to revisit Second Life as a phenomenon in the next six months or so.”

Thus spoke Wagner James Au, noted virtual worlds author and blogger in a San Francisco  Business Times article on Second Life (note: the full article is available to paid subscribers only).  Au, who blogs at New World Notes about Second Life, notes in the article that Linden Lab CEO Mark Kingdon has renewed the Second Life brand that was created by founder Philip Rosedale.

While the revenue model for Twitter is slowly coming clearer (judging by the accounts in the business media), Linden Labs’ strategy under Kingdon is becoming quickly self-evident with the announcements of the past few months.  From my perspective, Kingdon’s growth strategy is around a few core pillars:

1. Enterprise use of Second Life – makes sense, as enterprises and corporations can be monetized at a higher clip than individuals, artists, hobbyists, etc.  Enterprises (in the former of marketers) were a big portion of Second Life during its initial peak – and it seems the current focus is to bring marketers back into the fold, along with complementary uses in non-marketing disciplines (e.g. training, enablement, collaboration, etc.).  In the past 6 months, Linden Lab has hired 25 marketing and product people as part of their push for enterprise clients.  In addition, the company recently hired Amanda Van Nuys as Executive Director of Enterprise Marketing, signaling a further endorsement of the opportunity in the enterprise.
2. Nebraska – an on-premises software version of Second Life  (compared to their Software as a Service model), which enterprises can run on their own servers behind the firewall.  IBM has been an active partner with Linden Lab on behind-the-firewall integration – the telltale sign will be how many other large enterprises opt for the Nebraska model.  For “behind the firewall” use, I have to think that we’re talking less about marketing and more about collaboration.
3. Voice – not mentioned in the Business Times article, but Virtual Worlds News covered it well – Linden Lab is poised to go after the Skype market with capabilities to bridge voice calls and SMS messages between the real world and Second Life.  In the Virtual Worlds News article, Linden Lab Vice President of Platform and Technology Development Joe Miller notes, “The opportunity to monetize at a significant added value for our business is there”, regarding the opportunity in Voice.

IBM marrketing executive Karen Keeter notes in the San Francisco Business Times article that nearly 100 IBM’ers are “working on virtual world tools for commercial sale in Second Life and on other platforms”.  As such, IBM stands to achieve commercial gain from increased use (by enterpises) of Second Life and related virtual worlds.

In fact, it wouldn’t surprise me to see IBM leverage virtual worlds to generate services revenue.  Two things come to mind – IBM Global Services and IBM’s Smarter Planet initiative.  IBM Global Services could assist enterprises on their virtual worlds strategy (e.g. build me a virtual world representation of my data center, so that I can run heating and cooling simulations) – or, IBM could go in-world to enterprise’s private virtual worlds to provide traditional consulting services within the virtual world.

So a manufacturer who’s replicated their factory in a 3D world can have Global Services visit (in-world) to optimize their factory floor workflow.  Then, of course, Global Services could help facilitate the parallel action in the real world.  On the Smarter Planet project, IBM might create 3D models of the next generation power plant to show utilities how to become more energy efficient.  In a virutal world, I’m sure the possibilites are limitless.

Finally, Dan Parks of Virtualis is featured in the article.  Virtualis created a compound in Second Life with 34,000 square yards of meeting rooms.  Quite an interesting model – an event producer that leverages a re-usable area (virtually) to host meetings for corporate clients.  Companies who have done events with Virtualis include Deloitte, Oracle and Trend Micro.

I’d be interested in your thoughts – what do you think about the potential of Second Life for enterprises?

Related Links:

1. Blog posting on Virtual Offices, with reference to Amanda Van Nuys’ use of Second Life
2. Blog Posting: Virtualis and Trend Micro Put On Quite A Show
3. Blog Posting: Philip Rosedale On Building A Business: Practice Extreme Transparency
4. Blog Posting: IBM’s Second Life ROI: The Headline Beneath The Headline

This entry was posted on Wednesday, June 3rd, 2009 at 3:50 PM and is filed under Virtual Worlds. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.