Wednesday, October 28, 2009

Is Second Life a Business Application?

Check out JC's Midcourt for a discussion of this issue, a video from the web 2.0 summit, and a diatribe from me on the subject, which I also publish here.

Here is my comment on  this subject:

The problem with SL as a “business platform” is one of sheer overhype. Back in late 2006 when the SL Hype began, Business Week ran an infamous article on how Second life would trigger multiple-billions in sales as literally every major corporation and media outlet would set up shop. Automobiles (Scion), computers (the now bankrupt Circuit City), Levis, you name it all rushed in before they realized that SL was being overhyped in terms of what people would buy.

The most successful corporation in SL was IBM which found that it was a superb vehicle for cross-company collaboration. IBM held meetings in SL, broadcast conferences, and even made creating an avatar necessary for employees in certain departments. IBM has since moved many of its efforts (guess what? due to security) to its own world mitigated by linden technology. In fact, this is a huge area of potential revenue for SL- the selling of technology and services to corporations who want their own virtual worlds.
What has hurt SL with mainstream businesses is lack of security, SL's attitude that the best regulation is no regulation (guess why there is little enforcement of TOS people-- SL wants it this way), and hallucinatory growth projections that never came true.
It is shocking that Second Life has yet to achieve regular audiences of 100,000 concurrent users. In addition, the scalability of the server base is something that is not yet guaranteed. You think SL has problems now during peak hours with the new clients? It is not going to get any better for several years. Processes need to be ironed out,

SL quickly entered the famous "trough of disillusionment" as a business platform around mid 2007 when U.S. law enforcement officials shut major gambling operations down overnight, and the SL "stock market" crashed, and banks collapsed. This led to a meltdown in real estate prices. This scared many mainstream businesses, and many started to leave.
What we are now witnessing is SL moving into the business "plateau of productivity" - slow steady growth over the next several years. However, a little birdie inside of my head is telling me that SL could very well be sold- major players such as Mitch Kapor of Lotus 123 fame might just jump at a chunk of cash from someone like Google. It seems that Google's own virtual world plans have been put it disarray lately. And I increasingly realize that it will take the highly touted Blue Mars years to play catch up in today's economy.

But yes, the vision of Virtual Worlds as a web 2.0 platform is starting to come true, and will be very noticeable in the 2015 - 2020 timeframe.


  1. Linden Lab would like to believe Second Life is a business application, but the fact is it's a social platform, a visual facebook.

  2. I think that Second Life is both. Look at email. Its both a social and business platform. I am going to run my comment to JC's blog post now to let people know my view.

  3. Reading this after reading LL's announcement on their blog about "Nebraska" is quite enlightening.We know M and M have been pimping to the Corps for a long time now, and now have their walled garden to offer them. It makes one wonder what resources were diverted from the Main SL grid for this, and IF it ever does run, will The Nebraskans be the Lab's favored childrenfrom now on, to the detriment of the rest of us? Nice post ,Ed.


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