Monday, 19 May 2008

Gartner's Latest View on Virtual Worlds

Last week Steve Prentice of Gartner came up with his latest view of businesses in Virtual Worlds. Steve, you are probably aware, is the chap behind some rip-snorting headlines. Last year, for Gartner Emerging Trends Symposium/ITxpo 2007, Steve came out with the view that "by the end of 2011, 80 percent of active Internet users (and Fortune 500 enterprises) will have a 'second life', but not necessarily in Second Life." That one caused much debate, and not a little ridicule.

For Gartner Emerging Trends Symposium/ITxpo 2008, held last week in Barcelona, Steve's headline-grabbing headline was: "90 Per Cent of Corporate Virtual World Projects Fail Within 18 Months." Quite where this statistic come from, I really don't know. However, I can't say I have an issue with it. In fact, if you go on to read the rest of the announcement, you might conclude (as I did) that the outlook is far from bleak for virtual worlds. There is a fair amount of what I would describe as 'TBO' - The Bleedin' Obvious. A case in point is the sub-heading for the piece: "Success requires clear objectives, focus on users and realistic expectations." However, no matter how self-evident this is, Gartner rightly point out that too many have failed to follow it.

The piece then goes on to list a number of ways in which Virtual Worlds can deliver dividends for businesses. I cannot see that any of these would come as a surprise to a Virtual Worlder, but for those with no experience - or have given no thought to the subject - then these might prove interesting:

  • Rich real-time collaboration environment, far better than web-based tools
  • The cost to experiment is miniscule - a small outlay, with maybe big gains
  • Reduce the cost of travel by hosting virtual meetings
  • Know who your market is, and address their needs
  • Immersive scenario-based learning - particularly for hazardous occupations
  • Persistent virtual workplaces
It concludes with the advice to organisations "to experiment with virtual world projects on a small, internal scale initially and pace their development to enhance the chances of success and minimise costs." I am quite pleased with this concluding observation, since this is the approach we defined for ourselves 9 months ago.

So there you have it. Read the headline - and it's all Doom & Gloom. However, delve into the article and you will find this is a very positive piece about the corporate / organisational use of environments like Second Life.

Oh... they also slipped in another prediction, that by 2012 an estimated 70% of organisations will be running private virtual worlds, the 3D intranet. So you might now want to get hold of OpenSim, Multiverse, Wonderland, Qwaq or whatever else floats your boat.


Anonymous said...

One of the problems I have with the Gartner 'research' is that 90% of corporate virtual world projects haven't even been in existence for 18 months.

Aleister Kronos said...

Hehe... the same thought had occurred to me too. In fact, of those companies and organisations that I know were in SL over 18 months ago, I'd reckon most are still there.

It's a headline-grabber... to provoke or encourage you to read the rest. You are a marketing man, Nic, so I'm sure the technique is a familiar one! Not unlike Gordon Ramsay's recent "impose fines on restaurateurs who don't use local, seasonal produce" rant --- in the week that his new series started on Channel 4.

Digado said...

I'm divided on this one - I think they do have a point that 90% of the visible early adopters of SL has left by now - they joined riding the attention wave in cross media, milked it, and left. But in my eyes, that was a success, they got what they came for (but eventually came to expect more, which couldn't be realized with lack of experience - they typical hype cycle)

Secondly this article talks about business applications, something which to my knowledge barely happens in SL - it's just not the right platform and anyone advising it is has a community purpose in mind, and on a userbase of 500.000 I think no fortune 500 is going to have any goal beyond experimentation. (You might disagree on this Nic, and I admit its not entirely black and white as that because there could be a lot of potential 'sneezers' amongst those 500.000 - but in the end to them SL is barely half a popular webstie to advertise on)

So the 'walled gardens' of business applications has been a major part of my own research up to now, (mostly in the real estate industry) and I have to say 2012 is not too optimistic. The advantages are real, but what lacks is salesmodels to create valuable products to other companies (though one might argue Active Worlds has filled this nice with their modular white label already).

3-4 years to be adopted in the 'behind the firewall' environments for actual applications - definitely - (O'Realli Where 2.0 has some great great examples of this), the virtual workplace I'm still less convinced of because then you talk about mass adoption, not just professional adoption, which in my opinion will take longer depending on applications (obviously if someone develops a clear advantage over vid conference it might be faster, but i don't see it happening right now)

Aleister Kronos said...


I don't think that the 3D intranet "virtual workspace" necessitates mass adoption. Nor does the deployed technology need to be the cumbersome barrier to adoption that one finds with SL. Equipped with the right facilities/functions the virtual workplace is another tool, to be used alongside such staples as phone, email and face-to-face.

It is worth considering that a cumbersome learning process could be significantly offset by the realisation that one does not need to undertake quite so many tedious, time-consuming 300km trips for meetings that may only last an hour or so.

But for that to happen, it does mean the organisation incorporating 3D as part of their (internal) communications strategy.

Anonymous said...

@al. Sure, I'm a marketing man, but prefer steak to sizzle. Gartner has gone with the sizzle knowing it would get attention.

@rick. Don't want to get into splitting hairs, but there's no way on earth 90% of the early adopters have left SL, if left means deleting their island(s).In terms of SL being suitable for companies, I think it depends completely on the sector they're in. Horses for courses.

Aleister Kronos said...

Unless Mr Prentice meant "90% of the American corporations I jotted down after a chat with someone, ages ago"...

Digado said...

"90% of the visible early adopters of SL has left by now"

"90% of the American corporations I jotted down after a chat with someone, ages ago"

Not 'ages' ago, about a year to one and a half ago as the article covers :) the big hype of medium 2006-medium 2007, and yes, those where the visible brands of which I wouldn't be surprised to head 90% has left, again, as the article covers, Cisco, IBM, Sun, all those with vested interests have been around for a lot longer that that.

"I don't think that the 3D intranet "virtual workspace" necessitates mass adoption"

Well that's where we see things differently then :) If the technology isn't adopted yet it's useless to create these workfloors where the topic of conversation becomes the medium itself rather than the work to be done. It's still a big mindset change that needs to take place, and it's not about just painting a better financial picture.

What seems to be collectively forgotten is how time consuming the technology itself can be, and the efficiency of virtual worlds is still really lacking for simple, common workfloor tasks, especially witin SL. Sure, that 9 hour flight will get covered, but if you are prepared to fly for 9 hours, is that really the kind of meeting you'd want to conduct in a virtual environment rather than face to face? '80% of communication' and all that?

Even if you think the answer to that is yes, you still have to convince these DMU's, which is more than just facilitating the meeting itself on cost efficiency, its changing the perception of a meeting within virtual world, a big chunk of technological improvement and adoption (making/sharing notes, security, communication issues and interface), and the issue of competing with video conferencing which is already a lot more accessible to these DMU's by widely adopted/ubiquitous technology - something Virtual worlds can only dream of.

My own prediction is we will see most of these issues solved in the proposed time by Gartner, and some serious cases and benefits have been properly build.

Aleister Kronos said...

My definition of "ages ago" is Summer/Autumn, 2006. That is, more than 18 months ago - and a time when the first wave of companies had just ridden in to SL - Wells Fargo, American Apparel etc.

For the 'virtual workplace' there needs to be far better integration between the virtual world and external applications - and a much easier user interface than SL delivers. There is a range of communication mechanisms, ranging from face-to-face at one end, down to (say) snailmail at the other. Compared to face-to-face, virtual does not fare well. But there are many costs and inconveniences with face-to-face. I did a recent calculation of UK costs for face-to-face team meeting for 6 people - just part of routine team morale and communications. The cost, including loss of chargeable time and travel, came to around £6000 - for a meeting whose primary aim is team cohesion.

On the other hand, I have experienced the lumpen joys of Live Meeting, webcasts, teleconferences and videoconferences, and in my view I get far more value out of the virtual environment. Videoconferencing is still primitive, bedevilled with technical glitches, laggy and unwieldy for multi-site use. It is also inflexible, has no communications back-channels and often has kludgy/clunky collaboration tools. But at least it saves travel... It is not practical to leap on a plane to India every time there is an issue to resolve - even though resolving it face-to-face would be the 'ideal'.

In small companies, there's probably no point, since everyone is already in one room. But Virtual workplaces are a tool that can help the average organisation (actually, the larger, the better) cut its costs, and improve collaboration. And it won't be long before we can buy them off-the-shelf, with integration tools built in.

Digado said...

I see all that (and thank you for the calculation, thats useful information for my research!) but I'm not the one you have to convince in this optimistic timeframe you created - I'm already in the early adopters and sadly these Decision Making Units are often in the laggards category, long after it's been proven, and society (even workfloor societies) have adopted it. I'm still dealing with companies who think mailinglists or a 2D intranets are an innovation.

These DNU's never heard of google docs, they don't see the point in collaboration or even the advantages of a 3D workspace yet - this 'cold cash efficiency' only works if they believe in the trade off instead of thinking 'Whats the catch?' and in my humble opinion, it is going to take this adoption, these significant signals from society and their own personnel, staff - or more importantly, competition - to change this.

Of course there will be early adopting companies running ahead on this, either on experimental levels or limited implementation (I still have trouble finding some really good cases on actual use tho, even though I have spoken to people of RRR and VR Workplace and Actieworlds on this) but to truly become such a significant part of the workfloor it needs to become as boring as email for the masses :)

Aleister Kronos said...

I do agree that getting real buy-in, even with a reasonably clear business case, is difficult - even in a tech company like mine. In fact, it's a subject I can rant on about, over beers (real ones!) sometime.

Yet companies have taken to expensive and clunky technology 'solutions', like video-conferencing, without really facing up to the ROI.

If you have bright suggestions about actually embedding 3D into a tech company, then do let me know!

Digado said...

Well the projects I'm working externally on are mostly adding value rather then cost efficiency which tend to sort a different kind of reaction. When you show how there is money to be made instead of saved, the catch becomes an opportunity.

As right now I'm working on real estate, a lot of great work is being done by Keystone on the Arch blog, in collaborative design where learning/education becomes a huge factor for instance, or our own interactive presentations for flexible demonstrations of real estate as opposed to the traditional 3D stills.

Collaboration means clients are just more impressed with work that excels on all levels because its done by a team that each use their unique skillset to make something they are passionate about in the very same project, at the very same time, while educating each other. (Instead of working in PC cubicles, and transferring files between them). The skillsets of a team involved in real estate development vary largely, from interior designers to architects for floor plans and the 'walls' which means all vertical architecture, to the team in charge of safety, the weight of the building, and eco considerations. In practice, architect and a 3D designer each take turns in making what they think is right, then comment, and modify, and continue, and a lot of compromises must be made in the process because communcation is done over email, with no visual support, while collaboration educates them both at the same time in showing eachother rather than telling, often not settling for a middle way but for the actual best solution because they can both see and modify in real time (80%-85% of our cognitive skills is based on visual information, so it only makes sense by seeing each other work, and show what they mean, they would be able to really choose the better option out of the two instead of theorizing hypothetically).

This is something that can ONLY be done in virtual worlds, but it's also because of the nature of the real estate industry 3D plays such an important role in (behind the firewall) virtual workplaces.

The second one, of interactive presentations is not just an innovation from something that could be done elsewhere either. 3D stills get blown straight out of the water when a group of investors is presented with an interactive presentation of the same project, but able to visually support every statement and question, instead of just a chosen few beforehand (which was traditional in the real estate industry, and still is). The level of immersion into these projects can be deciding factor on projects in the $500,000 - $5,000,000 range.

I strongly believe the real value in communicating virtual worlds is in its three usp's (unique selling points) and the synergy between those, just communication (or rather 'mutli user') which is one of the three, is not enough. But when combined with immersion, or interaction with digital information - you create value.

By just using 1 of these key assets, you either end up with things that already exist (movies, games, tele conferencing, websites, powerpoint presentations) which means, within the company it becomes a trade-off ("we switch to virtual worlds") which will always be very hard to persuade anyone of because the value is unclear ("we where already doing X which worked fine, investing in Y might pay off, but it might not (or we don't know/understand what we are losing in trade for this cost efficiency) and we are not taking risks"). But using multiple facets in new ways, you add value by creating new products that give you an edge over competition and a lasting benefit, one with which you can become remarkable within the industry and really define your products. If done well within the existing chain of value of the company, you have a much easier talk in my experience :)

Aleister Kronos said...

I remain to be convinced that there is money to be made by corporate marketing efforts in VWs. I think that time will come - and it is worth experimenting now. But I would not expect real, measurable dividends now - no matter what 'virtual world consultants' may tell me.

The use of VWs for visualisation - and relatively low-cost visualisation to boot - is powerful.However, as with virtual workplaces, to get the most of it does require that the viewers are fully conversant with using the environment. Again, I can see a time when that will be 2nd nature, but right now we are in steep learning curve territory.

Whether one wishes to ignite the IMM/AUG debate is another matter - but in general, corporate users do not require Immersion (at least, as that term appears to be used in recent blogs).

Digado said...

Well those are my views too, the above is not about marketing products, spinning the story or addressing a market trough advertising, its about developing the product itself inside the company. Mass marketing is dead anyhow (LL has yet to realize this), but if your niche is represented significantly in the 500.000 active users (which are mostly sneezers and early adopters, meaning they are likely to spread the word) I don't see why you can not use these virtual worlds to contribute to existing campaigns on the marketing front. Trick is measuring and research into these niches if you want a serous effort which simply hasn't happened in the aforementioned '90%' because they entered with different goals:

Google: Personalized Results 1 - 10 of about 165,000 for adidas "second life". (0.26 seconds)

Personalized Results 1 - 10 of about 206,000 for nissan "second life". (0.33 seconds)

furthermore, the way I think of the immersionist vs augmentist is just world VS tool, but both augment and immerse.

Immersion is just the ability to place yourself inside that office, you need at least some of 'it' to recognise the affordances such as a 3D 'h' looking object is actually representing a chair, and something you could sit your avatar on to spacially organise the participants.

If immersion doesn't matter, if you are completely unable to put yourself in that location, I think virtual worlds hold no value to communication over existing lines such as IM, group email, google docs. Ogoglio is making the 'virtual world' for these applications - a 'virtual meetingroom' able to display 2D video, ppts etc in a browser, and 3D just is a new feature to index this content.