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Toney, Alabama, United States
Software Engineer, Systems Analyst, XML/X3D/VRML97 Designer, Consultant, Musician, Composer, Writer

Tuesday, June 26, 2007

Standards for Virtual Worlds: Only Money Matters

Standards for Virtual Worlds: Only Money Matters

I read this. It is interesting to me because it confirms what I've been saying about the recent flood of announcments regarding businesses renting property on the virtual world commercial server farms.

"While close to 50 retailers and consumer-oriented companies have established a presence in Second Life, others are starting to move to private worlds. According to a recent edition of BusinessWeek (in the “Inside Innovation” insert in June), Wells Fargo was the first to bail, with Starwood Hotel and Resorts said to be right behind."

Once again, our predictions from the X3D list are dead on target. This is no surprise. Those with over a decade of experience working in or on virtual worlds, have seen the cycle repeat twice and have a good basis for their hunches.

Selling on the web has always been about hucksterism and hucksters hate nothing worse than the grizzled old man on the bridge muttering "But can he swim?" The situation is that most of the analyst articles so prominently placed are not experience based but simple and somewhat thin journalism.

The business fascination for virtual worlds technology only took off when Mitch Kapor began to talk about it. That's fine. Reporting is seldom fresh news. It is typically third hand in the time span from emergence of a fresh idea to its widespread acceptance and so it goes. People with too much money only listen to what others with too much money say (see Davos) and so it is not a surprise that with over a decade of experience with virtual worlds on the web, Kapor will be credited with discovering it. Berners-Lee is still credited with inventing hypertext systems in some quarters and that is just market history. It is not a history of innovation but of timely opportunity and to be expected. This is the capitalist west where the importance of an event is based on the money made from a product not the timeline of innovation.

It is the speculations that are made based on this third hand information one wants to look at and inquire if any new ideas or observations are emerging by derivation. So far not many have but the obvious stuff is well... obvious.

1. Virtual economies are somewhat like the frictionless economy. It is an idea that enchants financial theorists in the same way a perpetual motion engine enchants and auto manufacturer and terrifies an oil man. No matter what you are trading, if it doesn't convert to real dollars, it is Chuck-E-Cheese tokens. Once it is convertible, it is taxable and there is the friction.

2. Virtual worlds don't enhance collaboration. They are better at coordinating a conversation than video. Games of any form enhance understanding because feedback is the essence of learning. There are stylistic nuances that can be added but that is a different topic. Nonetheless, don't overrate the collboration potential as being unique to virtual worlds.

3. Virtual worlds are very good when one needs to identify an object in the real world to a screen minus a language barrier. See last article.

For all the neat fun things we can do there, business in virtual worlds won't change business more than the web does already: it speeds some things up. It increases certain risks (putting sensitive information on servers you don't control is risky; having your CEO flying around a virtual world as Brer Rabbit might not really have that exciting rebranding effect you are looking for), and it offers exciting new problems for HR (is it really sex in the office if two avatars nip off to a private text to chat about their preferences or harassment if they talk about a third party?).

So all things considered, the rise of the private worlds hosted on the business systems of a company is inevitable and always has been. Public spaces for public functions are inevitable and obvius. Now it simply comes down to the costs of administering these systems for the companies that do use them for whatever application. For that reason, standards become even more important to the IBM's and the others who want to put these products into their services portfolios.

Once again, the elders say, look at the existing standards and vendors like you would any other business. Post an RFI with your requirements and see what you get back from the existing market. It exists. You don't have to create it. You have to work with it as a supplier and create a vocabulary for procuring it. Then sell it for a better price for the service mix. Done.

A 3D virtual world is just a client-service system like anything else on the web. Don't get wrapped around the sociology or the fantasies. Talk about performance and services and boil them down to costs. The market will react sensibly to that. Continue to make it a career-enhancer for your up and comers who's lips issue the voodoo rant of the metaverse mavens. Remember the 'information wants to be free' crowd? Look familiar? Continue this trend and at the end of the money Palimpsano and others are putting down what you will have is a lot of expatriate employees running their own businesses and selling their services back to IBM and others.

After all, this is about money.

That being the case, remember this: not all real-time 3D products are virtual worlds. So the question of some importance is where standards for virtual worlds overlap or do not overlap with real-time 3D applications of other types and is that really a question of any substantial importance given standards that can do both reasonably well. After that, only money matters.

There is little money to be made from owning or developing core technology unless you are a very big player. The services are plentiful cash cows. We all know this, so waiting for a monopoly position to emerge and going with that winner is a bad strategy. Finding a sustainable technology and implementation that meets the RFI/RFP for credible costs with the right lifecycle characteristics is a good strategy.

In short, the fact of virtual worlds changes nothing except the clients and the costs of owning content of the type the client renders. The rest is business as usual and there, only money matters.

1 comment:

ian said...

Interesting ... you say that "the rise of the private worlds hosted on the business systems of a company is inevitable and always has been" ... I wonder if you see this trend being extended to individuals as well?