Transforming Business through Virtual Worlds Capabilities – it's Déjà Vu All Over Again

Last week I was in London.  One of the main reasons for the trip was to meet with members of the press to discuss our new initiatives focused on the impact of massively multiplayer online games (MMOG) on business, in particular those games that are truly best thought of as virtual worlds or virtual environments, like Second Life.  Joining me for the press briefings were some of my colleagues in IBM who are experimenting with these new capabilities.  Some were physically with me in London, but most were distributed around the world - in the US, India, Canada, Australia and the UK - and joined as part of a virtual meeting conducted in Second Life.

For awhile now, I have felt that one of the most exciting areas of innovation is to recast our interactions with computer applications in terms of the humans that use them rather than the machines and software that run them.  In particular, since our brains are basically wired for sight and sound, it is not surprising that the more visual an application, the more intuitive and human oriented it is likely to feel.

I first became sensitive to the importance of highly realistic visualizations some fifteen years ago through my involvement with scientific and engineering applications.  In these fields, visualization is used extensively to represent the natural or engineered objects being modeled, simulated and analyzed.  As the costs of visualization technologies have dropped precipitously, the cutting edge of visualization is now taking place in the video game world, especially around the new generation of gaming technologies like Microsoft's XBOX 360, Nintendo's Wii and Sony's PS3. 

About two years ago, a study conducted by the IBM Academy of Technology concluded that technologies and capabilities from the gaming world would have a very strong impact on all aspects of IT, and made a number of recommendations for follow-on activities, which we have proceeded to implement. 

To learn what is required in a practical way, we have been using the Second Life platform to conduct a series of experiments, such as holding virtual meetings on a variety of subjects with groups of various sizes.  The meeting participants are represented visually by their individual avatars or personalized icons in the virtual world.  We are very interested in understanding how best to conduct such virtual meetings.  We have learned that many of the visual clues from the physical world should be embraced in the virtual world.  For example, meeting participants should be seated facing each other, as they would normally do in a meeting, and whoever is currently speaking should gesture with his or her arms. 

Many, many aspects of conducting effective meetings in the virtual world remain to be investigated.  Will we have different avatars for different kinds of meetings - perhaps using fairly realistic, more formal representations of ourselves for first time business meetings, and more casual, fanciful representations for meetings with colleagues and friends we know well?  How should one best represent the resources used in the meeting, be they presentations, live video feeds, demos, and so on?

Another exciting area of study is e-commerce in the virtual world.  The original, and now very successful concept of e-commerce, is built around the metaphor of a catalogue, which fits the page content notion of the Web and of browsers very nicely.  But in the emerging, highly visual virtual worlds, commerce could be conducted in virtual stores, the allure of which would be limited only by the imagination of the virtual store designers. 

We started to experiment with commerce in the virtual world during the Wimbledon tournament.  We built a site on Second Life that looked like a tennis court.  Visitors could follow the path of the ball in the virtual tennis court, and merchandise like Wimbledon towels were available for sale.  We have also built links to other commerce sites like amazon.com to show how easy it is to link virtual worlds with the more conventional Web world.

An important area we need to understand is how processes of all sorts from the “real” business world can best be depicted in the virtual world.  For example, in India we are experimenting with how best to inboard new employees using resources from the virtual world to complement the existing physical processes. 

I believe that using such virtual, highly visual capabilities to help us design, simulate, optimize, operate and manage business activities of all sorts is going to be one of the most important breakthroughs in the IT industry over the next decade.  Today's commercial applications, especially those involved in enterprise resource planning (ERP), are very complicated, monolithic and static, and often end up frustrating their users.  I am convinced that dealing with such business applications in a kind of SimBusiness fashion, - that is, the application feels like a realistic simulation of the business and its operations, - will not only transform IT but business itself.  Perhaps for the first time, we will be able to understand what is really going on in a business and its various processes, and then systematically improve and optimize them in multiple dimensions.

As Yogi Berra might have said, this feels like deja vu all over again.  When we started our Internet efforts in IBM about ten years ago, the Internet was already being used by millions around the world, and we had a very strong sense that it was going to have a huge impact on businesses and institutions of all sorts, but we honestly were not quite sure what that impact would be. 

We started to use the Internet and the Web for various projects within IBM and to study what others were doing out there.  We learned by conducting a series of experiments.  For example, we built a web site that would for the first time enable people from around the world to follow the chess match between Deep Blue and the then reigning chess champion Garry Kasparov in February of 1996.  Later the same year, we undertook the then really ambitious project of putting the whole 1996 Atlanta Summer Olympics online.  We learned a lot from these market experiments, and they helped us considerably in organizing our very successful e-business strategy.   

So, here we are in 2006, once more facing a set of fledgling technologies and capabilities -- massively multiplayer online games and virtual worlds – that are already being used by many millions out there.  Once more we have the very strong feeling that this will have a huge impact on business, society and our personal lives, although none of us can quite predict what that impact will be.  It will be fascinating to see where this ride takes us in the future.    

Comments

[Michael Kenward]

Very interesting briefing it was too Irving, even for an IT ignoramus like me. (Sorry about your programme at Covent Garden.) It made me look at the Second Life web site. Your team even managed to stay enthusiastic to the end of the day.

My challenge is how to present this sort of thing to non-IT people. Such developments make it possible to do many things. But they won't happen if they remain locked in nerdland.

It is easy to enthuse a bunch of IT writers, but it is much harder to get the message across to people in adland, for example, or those in mainstream publishing who develop web sites.

While you did not dive into such jargon as "ontologies," and your team is good at describing what they do, too many IT folks simply cannot communicate. This is particularly true of academics.

PS Your blog software refuses to accept the existence of the ".eu" domain.

[ian hughes]

Michael, it is a very interesting perspective that you bring to this conversation.
We do indeed have a challenge to explain things like Second Life to a wide audience. It is intersting though to note that many of the 'residents' of Second Life are not really tech nerds.
We have found that becuase of the visual nature of these sorts of things they are much less geeky and more supportive of the creative arts.
We manage to bring technical know how and apply it
The most intersting comment I have heard was from a mum who said. "This is what the internet was supposed to be and I cant understand why my 26 year old son does not 'get it'"
The really exciting thing is that this is a visual manifestation of a social trend. Much more accessible than the previous havens such as newsgroups, IRC (chat). You can see the communities, styles and interactions form.
We did not give a full profile of who was in the room but background wise we had a physicist, two programmer/architect types, a philosphy major. In the virtual meeting room we had a project manager, a business consultant, a former pilot trainer to name but a few. So as well as geographic diversity we had a whole host of different skills and personality types.
Whilst we were all from the same company, I know we are going the write direction when we see that sort of spread of interest, not just the latest tech geek plaything.
We did not show all the other commercial forays into Second Life but they are worth finding out about if you are interested
Addidas, MLB.com, Warner, Universal, Teleus, 20th C Fox, BBC Radio 1,American Appareil as well as the academic areas such as NMC. We have a mini round up on http://eightbar.co.uk/2006/08/17/virtual-worlds-introduction-presentation/

[Ijonas Kisselbach]

Another interesting post Mr. Wladawsky-Berger. In the last couple of months I've read your blog with interest.

I think you highlight part of the problem that online communities either not-for-profit ones such as Wikipedia and Digg, or commercial ones such as Amazon are trying to tackle. Namely that of trust.

IBM's results in Second Life, such as the use of Avatars, gestures and seating orientation all indicate the need to emulate 'real world' experience to generate trust and understanding for the community to work. Furhthermore, it underpins the need for a rules system to prevent the community from disentigrating in a "Lord of the Flies"-manner.

I shall continue to read with interest.

P.S. not sure if you're trackbacks are working.

[Tristan Louis]

I've got a couple of extra datapoints you may use in the following entries:
Economic Activity in Virtual Worlds ( http://www.tnl.net/blog/2006/07/31/economic-activity-in-virtual-worlds/ ) provides an overview of some of the money flowing there, Characteristics of Virtual World Users ( http://www.tnl.net/blog/2006/08/05/characteristics-of-virtual-world-users/ ) provides an aggregation of demographic data, and top 10 opportunities in virtual worlds (http://www.tnl.net/blog/2006/08/18/top-10-opportunities-in-virtual-worlds/ ) provides a basic framework as to some of the opportunities that could exist in the space.

Michael, this might help you out in terms of presenting it to people outside of technology.

[Francis Dupuis]

The problem of providing a business roadmap for 'non techies' and creating a compelling business purpose for virtual worlds is our speciality.
The two questions I get from business people are, 'how does my business benefit', and then, 'how do I get there'.
Those are the questions we continue to evolve our answers/solutions for.
Great post and comments.
Francis Dupuis (aka Floyd Field)

[Michael Kenward]

To Ian (well, one of the Ians)

I shouldn't have been so dismissive of the nerds.

What I should have said is that the message is puzzling for outside of the small circle of friends (pace Phil Ochs). Yes, the nerds and the "artsy fartsies" are dead keen. But I mix with people who are nearer bus pass country.

Last week I interviewed the chairman is a major FTSE 100 company. We are of a similar generation. He is dead keen on education and happily supports anything that will make it happen. But he didn't even talk about the technology that could deliver it.

Thinking on, I reckon that this could be a major use of the technology you helped Irving to demonstrate. Maybe the mistake was to peg it all to things like Amazon and to use examples that may mean a lot to those enthralled by everything e-nabled.

I'm sure that it will change the world as we know it. But for the life of me I can't see how I can talk about it to the folks I write for:

http://www.sciencebusiness.net/labnotes/

I guess it is the business case that matters, which you say is in the works.

One question, what is/are NMC?

PS It is very frustrating when typepad reject .eu web domains. It juist did it again. Someone tell them to join the real world. It is one reason why the US position on ICANN is unacceptable. IBMers should not associate themselves with that sort of IT incompetence.

[Markus Breuer]

Hi Michael, "NMC" is the New Media Campus or the New Media Consortium (see http://nmc.org/sl/) They have contracted a very well done "island" in SL which nicely shows off some of the possibolities with regard to meetings, collaboration, education, art in virtual worlds etc.

[Anonymous]

I worked in IBM for many years, recent laid off(fired). My manager is in Business Controls and she is perpetrating automobile rate evasion fraud by registering her car in NJ and living in Connecticut. She also is perpetrating tax fraud by living in CT part time and not filing a tax return in CT, exposing the whole IBM company to audit exposure.

In addition, I previously performed personal work at executives home on IBM company paid time. I was even given an award for this.

Won't it be grand when I dsiclose this to the investment and business comuunity. IBM couldn't care less about me so now its my turn to disclose.

The net of all this is the violators are all in Business Controls( the controls background of the company) HA HA

These violators need to be made an example of. By the way, her immediate management is aware of the situations she has created

[Lou Gerstner]

IBM Sucks. Thats why I left

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[Jason Mackie]

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[Chris Fonley]

Yes, it is true, technologies and capabilities, massively multiplayer online games and virtual worlds have had a huge impact on business, society and our personal lives in todays day.

[Paul Evans]

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[Jennifer @ vergent t1 service]

I had no idea MMOG had any sort of business application. I will have to think of a way for my employer to get on board. If being at work was more like playing a videogame, I might not mind showing up every day! Ha!