12 Responses for "Corporate Stupidity Or What?"

1. Digado | Mapping the Metaverse April 28th, 2008 at 12:06 pm 1

   You are confusing 2 completely different things. Your own passion and interest for a 3D metaverse (or accurately called ‘your little toy’ - a pretty big hint right there) as an individual (and extremely small niche of early adopters at this time), and the actual reality of creating value in virtual world communities.

   Though greed often leads to stupidity might be right, its a pretty strange statement to make when dealing with commercial corporations who’s single task it is to make more money than they spend, and especially within the context of the article. The numbers and facts show they are actually *spot on*.

   * Corporations don’t want IBM or sun to control their environments at all - they want control themselves. Coca cola, lego world, barbie world - thats the kind of virtual environment that’s interesting to big corporations right now because of the close control over content, which is particularly important when trying to address a market with a corporate message (something which has only failed in the open environment of SL so far). Furthermore, closed worlds can be accurately measured and influenced directly.

   * Competing within a single connected grid is not nearly as viable as competing over the entire userbase of the internet. Why ‘fight’ over the 500.000 active second life users (or the 1000 Open Sim) when you can pick your niche in a pool of 350.000.000 internet users?

   * Flat, corporately controlled worlds do better at getting their corporate message across. Their audience (kids) don’t mind this kind of control. This might not be your thing, but the numbers show these worlds are able to provide critical mass, while these 3D ugc communities are lagging behind by miles in the adoption curve.

   * As said, adult community worlds are a long way from reaching the same critical mass. There is no sufficient niche/adoption rate to invest right now as ‘we’ fail to provide accessibility and application. These problems will persist in the Open Sim movement which is really a technical toy rather than a real solution for the better part.

   * Corporations want controlled 3D environments for non-marketing uses too. The community has no value here if its for internal experimentation or application, infact they only provide risk (security, privacy, public image).

   * UGC is of value to the community, not to corporations. Show me a UGC ROI model for brands? Fact is they are not in charge of the message in ugc, which is bad news to the marketers and the efficiency of communicating with your market. The benefits don’t outweigh the rists (or COSTS in other words), and don’t contribute any value to the message itself.

   Conclusion:

   I think your vision and own needs will be a viable niche, certainly in the future, but this article is about realistic expectations of ROI within the next 2 to 3 years. That’s what corporations want. The completely lack of accessibility and application for this 3D UGC metaverse will persist throughout that period - after that, when these markets have grown, we might see more adoption towards this vision of the 3D web.

2. Gwyneth Llewelyn April 28th, 2008 at 1:15 pm 2

   As always, there are two sides to the issue :) For short-term projects, “controlled content” virtual worlds make a lot of sense — say, to do a launch event with lots of media splash. Even things like, say, CSI:NY would possibly make sense on a “closed content” virtual world — people would download a client, have some fun for a few hours, and delete it and never come back again. But they’d do it over and over again, specially if it would be something easily launched from a web page (that would be something Metaplace would probably do). If you had a way to save your avatar between sessions, even better.

   The other side of the issue is about persistent, long-term content. I’m pretty sure that corporations are not yet looking at that — or they would never invest in “proprietary, closed” environments. They’re in for the short/medium-term: launch a VW now, attract a hundred thousand users, let them play around for 6 months to 3 years, shut it down, launch something new (and utterly incompatible), and do it again. This has one advantage: adapting the VW to technology advancements, one step at the time (harder to do with SL, since it would break existing content), while keeping full control over all users. The disadvantage, of course, will be very low retention rates. Even if people will join those VWs for the social content (ie. other people), knowing that the relationships they establish are short-term, will make them invest little on a world/environment that will close “soon”. So once the novelty wears off (6-36 months), people will go somewhere else.

   That’s not surprising; that’s how the games industry works, with some exceptions (WoW being by far the biggest exception). The start-up VWs are just taking the lessions of “short attention span” employed by the games industry and apply it to the new generation of social VWs.

   In my opinion, however, although this might make for good and solid short-term ROI, it won’t be a long-lasting trend. The VWs that will manage to exist beyond a 3-year lifespan will be the ones surviving this current trend starting this year. LL has a huge advantage (and to an extent, There.com, even if they have a totally different business model…) by being around for five years (after beta) and very likely another 50 years or so :)

3. Gwyneth Llewelyn April 28th, 2008 at 1:20 pm 3

   Oh, and for the record, yes, OpenSim will be industry-grade in a few years (two at most), since the rate of development is much faster than LL’s own “proprietary” development — and it will, at some point, interconnect with LL’s 14 million registered users and their avatars. So, yes, betting on OpenSim should be a good idea, even if you can’t do much with it now. On the other hand, all content created on SL right now — which is “good enough” for the thousands of companies already using SL — will easily be transferred to any OpenSim grid once the InterGrid protocols are in place and the many OpenSim grids are able to connect to LL’s own grid.

   But LL has to move fast to be a player in the InterGrid — or the OpenSim grids will simply interconnect among themselves (without waiting for LL) and quickly outpace LL’s own user growth by 2010 or so :) I’m pretty sure that LL is fully aware of this issue, and I can only wonder about when they’ll announce their commitment to the InterGrid. I’d bet it be before 2010, though.

4. dandellion April 29th, 2008 at 3:55 am 4

   Thank you both for interesting comments.

   Digado, to prevent one more confusion, let’s note that creating value and profit are two different stages in biz process.

   Sure that statement about greed and stupidity is strange. I hardly think that companies with thousands of people oriented only to making money are missing their only aim so easily. That is why I wrote this and that is what provoked all the questions.

   You say that companies doesn’t want to have worlds controlled by IMB or Sun. But those companies have their complete IT structures controlled by Microsoft and, most probably, some other companies that developed software they use. SWaying that they don’t want somebody to control their grid while somebody is controling each computer they run is either hypocrisy or they really don’t see what is going on. I don’t know which option is worse.

   500.000 or 350.000.000 users are numbers that can be misleading. Those 500.000 are people that are VW savvy and have their (whichever it is) interest in VW’s. On the other hand, 350.000.000 of Internet users are by large people who use just email and a bit of web and have trouble understanding what RSS is. Sure, that is going to change but not in this year. It seems that VW technology needs to make that step from hard-core users to the next, a bit broader level in the user base. Sure, companies (those that need VW as a marketing technology) want the maximum possible number of users, but that is not the way things happen. “Fight” is not over 500.000 nor over 3500.000.000. At this moment, fight is to make 2.000.000.

   Corporate message across controlled worlds sounds great to companies but that is TV marketing model, i.e. the complete opposite of VW and Web idea. That is Sony’s vision: “Come to our world, get an apartment and a screen in it and you can watch the videos and listen to the music we provide to you”. I try not to live in an illusion that is not what majority wants. But, on the long run, that is very very bad model. Sure, kids will be the first to buy it, just make a good graphics and throw in a hint of flirting and sex. But hopefully there will be an alternative that will offer those kids to be creative and not just passive consumers of corporate culture.

   Controlled worlds for internal use are somewhat different story. But there is no reason not to have them on the same platform as “public” worlds. Just the same as Apache runs under large part of the Web that is broadly accessible but also intranets and even one-user local servers. The same software that is used for this blog that is a part of the Web is running on my own machine for my private use. Few modules here and there but it’s the same web server. There is no reason not to have the same model for VW. The same software can be used for running public grids, closed grids for some groups and even locally for one person for development, building or whatever reasons.

   I agree that UGC is of value for community and not directly for corporations. But, corporations live out of community. And that is the part I believe corporations forget very often. ROI model for UGC is a mistery for most of us. But maybe it is too early to talk about ROI. At this stage this is not a game for smaller players that need their return asap. IBM, Sun and Google can afford to play with something that generates value (at least in the terms of experience) without thinking of getting their money back in the next 2 or 3 years. They have the luxury of not having to think how value (generated by them but mostly by users) will convert into profit. We all know it will convert.

   Sure, one can advocate, as Gwyn said, “short-term” worlds that will work for six months or a year. But that is not metaverse, that is a game or an application. And those projects can make a revenue, but they are just six months projects. Fire, get money and forget. We are after something more important and more valuable here.

   And one other thing… one can expect to have different servers for the Intergrid. As long as we have standards and protocols so those grids running on different servers can communicate everything is fine. Actually that is great. As we have different servers for web, there is no problem in having different servers for grid. That is where open sourced projects are very good. You can fork the project and on the same base develop server that is more for gaming (being more stable and faster), one for socialization (that can handle more avatars), one for biz (more secure), etc… But for that to happen, somebody has to realize that staying in own backyard and trying to make everything there not letting others to see it is just wasting money and time. I agree with Gwyn that LL will announce their commitment to Intergrid. I am bad in guessing future, but I expect that even sooner than 2010. Maybe even by the end of this year. Sure, that depends on things both in and outside LL. LL is playing strategy game here. let’s hope they will not miss the window, cause that will be bad not only for them.

5. Digado | Mapping the Metaverse April 29th, 2008 at 10:35 am 5

   350.000.000 is the active internet userbase (source: http://www.nielsen-netratings.com/resources.jsp?section=pr_netv&nav=1) - visiting websites. That is the corporate internet audience. Why would a corporation like sony focus in on VW savy unless that happens to be their specific niche? This is what I meant by separating corporate goal oriented thinking (which you seem to see as greed) to a passion for ‘the metaverse’. I’d love to be able to say ‘Hey, lets all focus on this big interconnected 3D world we can all have a great time in’ but truth of the matter is, that model is not effective (yet!) to corporations dealing with a mainstream audience while these branded nicheworlds DO have high short term potential.

   The ‘old ‘ marketing model has nothing to do with the way you describe it. I could go into detail here but suffice to say ‘old marketing’ is the interruption model (commercials interrupting TV programs to seize attention), while new marketing is remarkability (viral) and preferred advertising (something you choose to watch/see) towards specific niches. In the mainstream these niche worlds are both. they attract rather than interrupt their audience, which is NEW marketing :)

   IT structures are no where near what corporations want out of virtual worlds. They don’t want their data stored on there, they have structures far better at doing so already - what is the value added by a 3D metaverse here? I was talking about community worlds, the branded worlds - those they want to control themselves, the content part that is, just like they want to control the content of their websites. They could still hire IBM or ESC to MAKE the world, but their marketers send and receive the messages.

   Within these walled gardens, there are a lot of issues to deal with when interconnected we are just beginning to see some developments in. Security, data protection, accessibility, the value of interconnectivity, competition, ‘browsability’, (adult) content issues, rights management, customized functions, interfaces and grids to fit specific corporate goals - te ‘Intergrid’ simply doesn’t have the solutions yet, and won’t have them within the next 2 to 3 years. The picture of benefits VS rists/costs is still far, far to fuzzy to consider seriously at this time when talking about an interconnected metaverse. The core issue here is VALUE. What would this interconnectivity cost me, and how would it benefit me :) I think you’ll have a hard time formulating an answer to that.

   I think a lot can be learned from the Active worlds model (currently dominating the b2b virtual world market) - 99% of those white label worlds are sold completely customized (which is active worlds core business model). Even though the platform is the same, 99% of these companies don’t WANT interoperability, or portals from their world to philips or siemens, or even a community. They can invite those they want in trough the internet, and believe me when I say this works a lot smoother than Second Life will be able to within well… the forseeable future. Because AW focusses on interoperability trough existing web protocols rather than reinvent the wheel like this metaverse seems to need from a SL point of view.

   Last, No ROI on UGC is not a ‘mystery’ - there simply is no EFFICIENT ROI model for UGC in 3D communities for third parties, which is what it comes down to :) I could think of models, but corporations can do those far, far more efficiently already, where they can reach the same niche and control the message being send to their community - old OR new marketing.

6. dandellion April 29th, 2008 at 4:59 pm 6

   No, I don’t see goal oriented thinking as greed. Not necessarily. Greed is an attempt to make more profit than value. I know there are 350.000.000 (or like) Internet users, but not all of them are target of companies that want to use VW’s. At least not at this stage of the game. Going for all of them is silly and, may I say, stupid. Result of such an attempt are all those problems with retention. one can hardly expect that regular Web user will find its way in SL (or any VW). i still don’t think that UI of SL is that hard (sure it can be better). Not the immersion is a hard thing to do. But you don’t expect my mom to sit here and jump into SL the way you and me do every day. And no 15 minutes orientation process will solve that. For that reason, it is greedy to go after 350.000.000 of users at this moment. It is trying to get more than possible. Also, for that reason, short-term VW’s can be good, as some kind of preparation for people to get the idea of 3D space, interaction and virtual environment. But still, those projects are isolated applications, not the network.

   What I was talking about is when a corporation wants its own VW so they can force it over all the others, cleaning the competition and refusing to cooperate. Well, that is greed.

   Answer on the question what would interconnectivity cost a company and what would it benefit is not that hard at all. It would cost less than developing the new system. The benefit is being a part of the network (and that is a huge benefit in the terms of getting new users more easily and not having to develop everything from the scratch every time) for the cost of being a social and friendly being, that is speaking the same language as those that do the same or similar job. benefit is having a project that is not time-limited on (let’s say) a year but which evolves and lasts.

   Sure, this is for those who can afford to have long term projects that generate profit on the long run, but also generate much higher profit. Problem we have is that most of VW companies cannot afford that. They are small and not as rich as Google or IBM, they want to jump into wave as web was a decade ago. But, while there are some similarities between early web and VW’s, later are harder and significantly more expensive and not so easily reachable for small players. Which maybe gives us an answer why a big corporation wouldn’t want standards and open systems available. Why having thousands of small entrepreneurs as a competition?

   ROI on UGC is possible for the third parties. Don’t tell me that CBS had no profit with all those islands they rezzed. Maybe (probably) the profit is not direct but engaging community around what you are doing IS generating a profit.

7. Digado | Mapping the Metaverse April 29th, 2008 at 6:06 pm 7

   The difference is not going after the entire market, its differentiation of your niche from a larger market to begin with. Brands use flat, secluded niche worlds because they are open, and have proven to be capable of providing critical mass unlike SL because they differentiate within a bigger pie, and capable of delivering clear messages addressing a single niche and are goal oriented (the target is clear from the beginning, as opposed to open end grids).

   “Answer on the question what would interconnectivity cost a company and what would it benefit is not that hard at all. It would cost less than developing the new system. The benefit is being a part of the network (and that is a huge benefit in the terms of getting new users more easily and not having to develop everything from the scratch every time) for the cost of being a social and friendly being, that is speaking the same language as those that do the same or similar job. benefit is having a project that is not time-limited on (let’s say) a year but which evolves and lasts.”

   I actually knew you couldn’t resist replying something like this, but its the same fluff we’ve been hearing over and over again while never proven (and don’t say it hasn’t been tried). The conclusion is the focus is wrong. You focus on a vision for a community rather then corporate goals which is why you don’t understand them correctly. This conversation of community and social media is not reserved for Virtual Worlds, and USERS are already interconnected trough the INTERNET. This object oriented thinking of a single community grid is based on nothing:

   1) You conveniently ignored all the issues raised in my previous post about the risks, and costs towards this joint network. Building from scratch certainly is cheaper rather then to try to work within the limitations of this interconnected grid. (Try creating a habbo hotel in Second Life) without providing a clear VALUE for the corporation involved.

   2) You add something completely unfunded except by your own theory about how things should be, while at the same time being contradicted by MDA’s (ESC pulls out of SL - sort of), Investing Companies (retreat of Adidas, Mercedes, Reebook, ING, ABN etc etc, and don’t say they couldn’t afford their presence for long term benefits, there just where NO current benefits within Second Life as a community grid), facts as they where presented at the VW’08 (the market is teens and these secluded niche worlds, corporations want to send targeted messages to their specific market within controlled environments), and further argumentation in both my and Gwyns reply.

   Furthermore CBS/ESC is not releasing their numbers but from reading a lot about their venture i certainly would NOT say this has been a very successful venture for them, if it was, they would have released their numbers. Besides the CBS Venture had very little to do with actual UGC, it was a corporately coordinated event, not a community created event.

8. dandellion April 30th, 2008 at 10:32 am 8

   OK, to prevent further dispersing… can you tell me what do you think company’s value, profit and risks in both application and network are?

9. Digado | Mapping the Metaverse April 30th, 2008 at 1:38 pm 9

   Value:

   How can virtual worlds make a lasting contribution to your specific chain of value trough their usp’s which are ‘multi user, digital and immersive space - How can they help your efficiency (improve existing processes to go faster/cheaper), contribute to the creation of new products (innovation), new marketing (sales or conversation with your market). Only this last fragment would require a community, but even than you have to wonder whether you need everyone, or whether it wouldn’t be more valuable/efficient to JUST attract your specific niche, and make an application custom tailored to do exactly that.

   Example: The pink barbieworld application with simple interface and ‘browser client’ will attract only those interested in barbie, their niche - rather then SL which would have a very very hard time to attract these users in the first place, and the few that are would be even harder to reach inside the application.

   Profit:

   The (positive) result of the applications created with the above in mind.

   Risk:

   Now back to the barbieworld example - I think the risks of making their world inter connected directly to other worlds are pretty obvious:

   * Security/Privacy (how safe is my data in the hands of a third party on an open grid)
   * Content (what else is happening on this specific grid and how will it influence your presence inside and outside the virtual world)
   * Stability (With the hardware in the hands of third parties,
   * Efficiency (How sustainable is the stream of attention in a world that is interconnected, aren;t my consumers going to find my competitor and stay there, and what would it cost to get attention in the first place in such a big but separated environment?)
   * Accessibility (With the client or software out of my hands, do we take responsibility for the accessibility issues such as slow servers? How do we improve the experience to our specific ‘island’ within this third party space)
   * Rights management (Who owns my content, who owns the content I’m provided with by users, can we overrule the third party ruleset)
   * Software Limitations (What if this inter operable grid is not able to provide the things I want? What and how will I get those inside this framework and how do i prevent the competition from having access to these same functions?)
   * Tribal Migration (My market leaving my application and joining other competitors)

   Solving these issues will take a lot of money, and time. Most of these issues aren’t even beginning to be addressed, and what would be my benefits as a CORPORATION be exactly? I’m already doing a better job attracting my market because I use this pool of 350.000.000 users rather than the 500.000 users in SL, I’m talking to my market, I’m getting their needs and wants and I can innovate from there. I could even turn my program around to be profitable itself, something we will certainly see with Lego for instance - something that would be a thousand times harder to do on this ‘grid’ at this point (like we said, within the time frame of 2 to 3 years)

10. dandellion April 30th, 2008 at 3:44 pm 10

    What you miss is distinction between virtual world and a simple one-use application. We have applications for ages, there is nothing new there. And we know that apps have life span, usually from 6 months up to two or (if company is lucky) three years. Contrary to them, worlds have more than one use, are extendable and are made to last longer.

    That is obvious from taking barbieworld for an example. That is not a virtual world, that is a game for kids. Yes, it is great in what it is made for: promoting Barbie and Mattel, brainwashing of kids and further squeezing money from parent’s wallets. But it is not VW.

    But let’s go through those risks….

    Security/Privacy: how secure is your data on the web? Would you keep company’s data on third party flatworld servers? Maybe you would maybe not. That depends on how data is valuable, can your company afford own servers. Sometimes it is more secure on third party servers. There are companies who are more reliable than keeping own servers. Sure, that has a price. But one cannot say that one way is more secure than the other for any case. Whether you choose to keep your data on your own or third party server Intergrid is what we need here. Without it you don’t have an opportunity to have third party servers nor opportunity to have your own server and stay connected to the rest of the world. Actually, this is one of the main reasons both Gwyn and me are pro Intergrid.

    Content: Oh yes. The big porn one. Well, only way to prevent unwanted content is to make yourself the only content creator with possibility to give licenses to third parties. But there are drawbacks to this. Content creation costs and that can be a significant amount if you need a lot of it. have in mind that if you want your world to last you need fresh content to come all the time. Also, UGC is very attracting to the audience. No need to say the magic word of Web 2.0 to illustrate that.

    Efficiency and tribal migration: Sure that in interconnected world you can (and will) lose audience. Sure that migration will go other way too so you’ll gain audience as well. Whether you’ll be positive or negative in that flow depends on the quality of the locations on your grid. But, if your content is not good, people will not stay anyway. They will just switch to some other world. Have in mind that in the case of connected worlds you will have a second chance, people that go will probably come back after a while. isolated systems are easier to forget.

    Accessibility and performance: Slow servers are not accessibility but performance issue. If your island is performing bad you change the server, just the same thing we do if our web site is performing bad.

    Rights management: You own the content you created. Don’t be fooled to accept any other contract. Simple as that. It would be crazy to think that my host have any rights over the words and pictures on this site, right?

    Software limitations: If the platform is not doing thinggs you need, then you pump some money into system and make a plugin, module or whatever we call that. That is just one small part of what you’d need to make if you also develop a platform for that plugin. hopefully, you’d be nice to share that plugin with the rest of us, just as the community shared the platform and the rest of plugins. Or you can keep your plugin for yourself. Plugins you talk about are server side so they are safe as any other software.

    It seems that you are missing one important thing here: Intergrid doesn’t mean we all use LL’s SL as it is. We are talking here about creating standardized protocols and software. That means you can run server either on LL’s servers, some third party’ servers or your own servers. And you are free to choose which of those three is best for you. That also means that at least one server software is opensourced so you have all the benefits of GPL’ed software: freedom to use, to modify and develop. Sure that Intergrid makes firewalls possible even to the level that you can switch off from the rest of the world and stay isolated.

11. Digado | Mapping the Metaverse April 30th, 2008 at 5:07 pm 11

    I’m sorry, but i find none of your ’solutions’ very reasonable to support your theory of a single grid within the corporate scope. Futuristic surely, perhaps we will see even part of these resolved on the next 2 years, but your view is just not realistic - which is what these corporations as described in your article focus on, simple ROI.

    I don’t think we will use LL and SL as it is, but thats the platform available right now, ‘the best we can do’ for mass consumption on a single grid, and it’s simply not good enough, and besides that, you constantly fail to address the value of this interconnected grid. Even with the resolved risks you are being vague on what the benefits would be to these corporations.

    So as a final word from me: ask yourself, realistically, who would develop these protocols, how long would it take, who should invest, and what use it would be, then compare that to the here and now of corporate ROI, the development of solutions that will make money and tap into mainstream audiences trough virtual worlds, smoothening the adoption curve with every new user signing up to these closed worlds. I keep going back to ’separate your vision from corporate goals’, the two can not be matched realistically right now. Look at the (technical, social and commercial) developments that would require this futuristic vision to happen, and you’ll see that won’t happen in the next 2 to 3 years, and though the community/user value might be reasonable once this grid has been made, corporate value is fairly limited as they are already ARE connected to these users trough the internet :)

12. dandellion April 30th, 2008 at 7:29 pm 12

    I don’t mention benefits sause I really find surplus to try to explain to you why Web is better than BBS’s. Or you think we made a bad move connecting all the isolated networks? beside that, I find very benefical possibility to have different servers instead of one and variety of browsers/clients to choose to connect to those servers. Also, I find a very neat idea to have access to different grid with different goals with the same avatar, same microcurrency account and same inventory (though I expect multiple microcurrencies in the future and also possibility not to keep all my stuff in inventory but to access my local files more easily). Sure, it also sounds nice not to create accountt and avatar for every world I might be interested to visit. That is also corporate goal as more people are “in the pool” if they don’t have to register, go through new orientation process and eventually to download and install new client.

    Only reason we’re hearing from you is that Intergrid is bad for corporate ROI. Going for profit and against creating the value is greed (to answer your question once again). In this case, it is also trying to get profit in a way that makes less profit on the long run which is not only grid but bad strategy (I am trying not to use the world from the title).

    It is not a question who will develop the protocols. have you ever heard of AWG? Ceck Gwyn’s article for a nice idea of LL turning into non-profit foundation. how long it would take is a tricky question. I really don’t know, but one of the reasons I am writing all this is that it has to be done asap, before more corporations start listening to your ideas and increase the mess that is already there :) Who will inverst? Well, companies, once they find out that it is in their interest.

    I don’t understand what are you saying in “they are already ARE connected to these users trough the internet”.