The Maturing of the Virtual Worlds Industry

2007 was unquestionably a significant year in the development of the Virtual Worlds industry. It went from a mocking human interest story at the end of the nightly news to the covers of prominent business magazines. As the proverb says however, 'Be careful what you wish for....'

There have been prior attempts at a 3D Internet, particularly around the Virtual Reality Modeling Language (or VRML). There were a number of market reasons that VRML never reached widespread adoption that were independent of VRMLs technical merits. In contrast 2007 featured the ramp of Second Life for public social collaboration and visibility for companies such as Forterra Systems for intraverse simulation and training.

The questions that we were asked during the 'New Ways of Working' panel at the Virtual Worlds 2008 conference last week in New York all seemed to be searching for the elusive initial proof-points to justify and quantify the benefit of virtual worlds in the enterprise. This is not unique to virtual worlds, and is a recurring theme in all of the emerging technology trends I have participated in. Early adopters attempting new projects within their organizations fortify themselves with metrics and other case-studies of successful deployments to demonstrate to their management the benefits of the technology in question, and virtual worlds are certainly no exception.

The current proof-pillars of this industry, however, are still scarce, with elaborate simulations being performed by the U.S. Government within Forterra Olive, as well as the Stanford SUMMIT medical simulations on the same platform. In the consumer area, there have been numerous examples of training and education within Second Life (including my employer) and isolated non-self-referential instances of collaborative design projects (most notably Wikitecture). What has not happened yet are the secondary ripples of these initial 'It can be done' proofs-of-concept, which will begin the snowball effect of more examples feeding more deployments which become examples for subsequent projects. It will take some sobriety on the part of marketing departments throughout industry, making sure to identify real value and not hand-waving, and it will take more time for the existing trials being conducted to bear fruit.

Two negative side effects of the excess of positive press in 2007 were that (1) each vendor in the 3D simulation area became an overnight sensation while many of their platforms were not ready for mainstream deployments, and (2) the peripheral/adjacent markets in this space (3D rendering engines, virtual economies, etc.) stampeded over to participate in the virtual gold rush, which made it harder for non-industry customers to get a bead on what this space actually is and how it benefits their organizations.

What this market pressure has exerted is a degree of speciation, in that companies are beginning to polarize into platform providers (intraverse or metaverse?), and component technology providers. An impacting externality to this is the emergence of the 'software as a service' business model within companies, who are evaluating these new virtual worlds not only from a 'should we/shouldn't we' decision, but also from a 'hosted/service' decision as well. One more barrier to adoption.

Speaking of barriers, if you ask most virtual world platform vendors what their top five barriers to adoption are, inevitably one of them will be the issue of 'corporate firewalls'. Given the immaturity of the technology, the non-standardization of ports and protocols used across vendors (which, admittedly, will be the case for some time as is the case in each new technology cycle), and the absence of overwhelming-demand on the part of major corporate clients, the corporate information-security technology departments will be in no hurry to poke holes in the corporate firewalls for a currently unproven application. It will happen over time, or the protocols used may render the discussion moot by leveraging lessons learned by companies like Skype in the VoIP space.

You see the initial furtive steps of companies to offer both a SaaS or Hosted model of their collaboration environments (such as the IBM/Linden Lab announcement) as well as overtures in that direction by companies like Qwaq. That will remove one barrier to adoption.

There have been the overtures towards data standardization with Multiverse and Google embracing COLLADA (and Intel hiring COLLADA people as part of their strategy) and the Virtual Worlds Interoperability Forum (of which I am a member). These efforts will initially focus on interoperability between virtual worlds and Internet data sources (like COLLADA files) rather than avatar portability. In contrast to my prior post about the future of virtual worlds, this degree of interoperability will be sufficient for some time as the broader Internet identity problem is resolved, as a choice of 'presentation layers' (in the form of virtual worlds) of a common dataset will be functional enough to limp along. The difficulty in that scenario will be in cross platform meetings.

The next post will posit some paths that the industry can take at this juncture, and if it will continue to be rather boutique, or will move into mainstream deployments.

Comments

[Casius]

It might be both boutique and mainstream deployments if the new Linden Labs business model to allow corporations to create there own Second Life worlds and then allow us to move between them.

When the recent announcement of allowing IBM to run Linden software on its own servers is combined with IBM's aim for inter-world integration I am wondering if we are looking at the beginning of SL as a multi-business platform. Where we can cross over from one server to another and keep our Avatars and our identity. Will the plan be for us to "cross over" to Playboy's own SL servers for sex and then the Bellagio's own SL servers for gambling? Will Linden Labs license out the Second Life platform and allow the 3D Internet to be more like the World Wide Web?

[Len Bullard]

RE Collada: That is it, Christian. Language standards create portable data. Portable data is the low hanging fruit. Somewhere between Collada and X3D is the sweet spot where all the energy pushes the market instead of the hand holding the bat. Keep this in mind:

Data is portable. Systems interoperate.

Learn from the markup tribe that has been over this ground hundreds of times over four decades of work:

"Nothing happens until a byte changes state." Dr. Charles Goldfarb (IBM Almaden)

X3D also has legs. Note however, that VRML97 remains the largest format for export of choice in commercial editors. For a failed format, it keeps on keeping on and that may be the most important lesson to learn: the power of survival over being the biggest lizard in the jungle.

1. 3D On The Web is a creeper technology. It is difficult and costly to build anything compelling. Utility wise, libraries do well. Otherwise, rent space for short term events. But don't expect a big Thing event. The flash of last year was not driven by Second Life but by the IBM announcements (mostly FUD as it turns out) and the billion dropped into the market by the VCs (mostly evaporating like fresh rain fescue seeds that aren't in the ground yet).

2. Don't expect any platform or format to dominate now or perhaps ever. The "sensible" engineering approaches were tried and as it turns out so far, this is not a "sensible market". Blame SillyWood for that. Entertainment and engineering are like music and politics: a bad brew.

3. The interoperability forums are a bust. Why? No one is actually there to promote the market except for themselves and the geeks such as the Forterra CTO keep pushing a local technology solution instead of understanding that standards are only one fifth technical solutions. Standards come about as a result of the market requiring them as a means to create scale and so far, the market has none. Until it does, interoperability forums are mostly chest thumping.

4. The folks like Vivaty have it right for now. Consumer services with virtual worlds as part of the solution are the market to chase for viral adoption. The virtual world as enterprise widget has a ways to go. Artists aren't usually communications engineers despite claims to the contrary. There isn't enough practice to yet say we have a practicum and too much dogma to say we have pragma.

Because it is a creeper market, don't expect a big flash. One day you look in the screen and it is just there, somewhat like old age.

[Jon Watte]

I think you're right on it that the interoperability will be an important business driver. If we can solve those problems early, and achieve real platform interoperability, we don't need to suffer the balkanization that happened to another important enterprise technology: instant messaging. I think it's important to view virtual worlds as a technology with "network effects" that allows multiple client and server solutions, while still allowing interoperability, just like e-mail. Except VWs are interactive.

I've written a little bit about how I see this coming about; you might want to check out the following links:

http://www.interopworld.com/members/node/31

http://www.interopworld.com/members/node/22

[Lourdes33Casey]

I strictly recommend not to wait until you get enough amount of money to buy different goods! You should get the business loans or financial loan and feel fine