OK, seriously – I think I’ve gone off the deep end.
I seem to be the only person associated with virtual worlds who doesn’t think the Lab is having a liquidity crisis, who thinks that they’re going to announce a massive technology change when there’s actually no real hint that they have it in their plans (other than some comments Philip made off-hand at SLCC), or that they’re up for sale.
And now, in keeping with my delusional streak, I’m going to propose something else: Linden Lab needs to increase the fees for enterprise use of Second Life, and align this to a service package tailored to this audience. In other words, much like the price increase for education and non-profits (about which they’ve sort of, vaguely back-tracked on, but not very effectively, and not really), I think the Lab should increase the price for businesses on the Grid.
Here’s my rationale:
- Second Life Enterprise (SLE) wasn’t given the time to sell. As a result, it was sold in the dozens rather than the hundreds
- The price point for SLE was close to 6 figures, which was in line with platforms like Protosphere or Olive, but wasn’t the kind of thing you could sell in the first 6 months on the market (especially not without ANY advertising or promotion other than Mark Kingdon standing up in a workshop at Enterprise 2.0)
- The advantage of SLE was that it used the same technology as Second Life. But aside from that, it really only had a few advantages which were, to most companies, nominal:
> You could deploy it behind a firewall
> You could keep an ‘inventory’ of sims and bring them up or down as you wanted
> You could integrate it with internal identity systems using the LDAP protocol.
But other than that, SLE had significant disadvantages:
> There was no content. There was the promise of a new SLE Marketplace, but it never materialized. (They should have launched it at the same time, but whatever, they don’t usually do things in a meaningful sequence anyways)
> You were limited to, um, I think it was 8 sims active at a time. Hardly what a multi-national company with 100,000 employees would need if it was a true enterprise-grade application.
> It came out before Second Life Shared Media
But there is a market for enterprise use of virtual worlds. I’ve said this before: the tipping point came but no one really noticed.
I have no issue convincing enterprise that there’s a value to virtual worlds. The challenge is matching that value to a specific corporate need.
My own belief is that for enterprise, virtual worlds are best suited to agendas related to radical collaboration, innovation, change management and team-based learning. If you want a simulation or you want to save money on travel, there are other, more suitable alternatives than Second Life.
Based on this, enterprise will spend money and will participate in virtual worlds.
But there are several barriers:
- The issue isn’t putting the world behind a firewall, the issue is getting to the world from behind one. Port restrictions and site blacklists often mean that you bump up against IT departments who are reluctant to make access possible because of security or other concerns.
- Computers in enterprise, contrary to popular myth, usually suck. Most companies have capital cycles that run in the 5-7 year range, and there will be large segments of their employee population on old machines running old software with crappy video and graphic cards.
- Enterprise can’t abide sending their staff through the Second Life sign-up and orientation process. It’s too commercial, too consumer oriented, and policy issues come up.
And finally, and perhaps counter-intuitive to many, Second Life is too cheap.
One of my own axioms is that if a project is too small, it doesn’t get the executive attention it needs, especially if it’s a strategy-level initiative.
I remember a client telling me once that they never consider a project under $200,000 no matter how good it is. Projects under that amount can’t generate the internal attention they need and don’t act as ‘rallying points’ for teams that can be dispersed through multiple departments.
Now, I’m more than happy to pay Linden Lab a few grand a year and pocket the rest myself 
.
But for companies who are looking at virtual worlds and do their research on Second Life, the price point advertised can actually be off-putting. I’ve actually had that response: “If it’s so cost-effective, can it be any good?” (and although the answer in some respects is “NO, sometimes it ISN’T all that good”, the broader answer is “YES, when you put up with some of the glitches and hassles, the ROI is significant).
So the Lab should increase the price to enterprise users by packaging sim rentals with a larger value proposition that addresses the concerns of business. This value proposition should include:
- Standard pricing on sim rentals so that we don’t have multiple standards for island purchase/rental
- A new sign-up package that allows companies to register users through some sort of upload procedure. Companies should be able to upload a file of employees and receive avatar accounts back in return. The system should be completely automated and controls given to corporate clients.
- A pin-to-estate feature that allows companies to restrict the ability of their users to access other parts of the Second Life Grid.
- A corporate orientation package based on Web templates. It should allow enterprise users to insert their own graphics and to then post that package internally. The microsite should include tutorials, an optional download page, avatar selection pages and other content.
- Sim packages that include more than just buildings and terrain, but include orientation areas, avatar skins and shapes, and business-friendly clothing.
- Corporate information packages specifically written for IT departments, managers, project managers and others. These packages should provide all the background information a company would need without needing to dig through the Second Life Wiki (an exercise in frustration). They should also include subscription-based updates and newsletters.
- And assurances that the Viewer is either corporate-friendly (no sudden changes to the ports, for example) or a separate spin-off viewer for enterprise.
Finally, and this is me still being delusional about where Linden Lab is headed, this package should include the option to purchase bulk numbers of hours for cloud-based access to the world via a browser.
Now, I realize that this proposition is completely counter to the approach the Lab is taking and its focus on broad consumer audiences. But I’m also convinced, because I’ve seen it and have clients who are headed in that direction, that enterprise IS a mass audience, and that there are companies out there who want to bring thousands of users into Second Life, if only the conditions were tweaked a little to make that happen.
So, crazy as I’ve become the past few weeks, I might as well be crazier still and make a plea: raise the price of Second Life for enterprise. You would be doing me a big favor and my clients will thank you.
if you REALLY have clients who want it..i feel for ya…cuase they wont let you sell it…
old hat in web3d media… and why after 15 years most of my works is nothing but screen shots to be seen….
rarely have i met the web3d tools maker that wants anyone to make business with their platform not under their thumb…
unity3d seems to be the current pleasent exception…were a few others in the last 15 years.. but no more than maybe 5 companies…
wait till you see how impossible it will be to do design/creative services with your CLOUD PALS…lol
i guess the peanut gallery will wait till you tell them;)
[...] This post was mentioned on Twitter by Mal Burns and Dusan Writer, Doubledown Tandino. Doubledown Tandino said: via @DusanWriter Dusan Writer Off the Deep End: Please Raise Prices on Enterprise http://bit.ly/cymHP7 [...]
“I seem to be the only person associated with virtual worlds who doesn’t think the Lab is having a liquidity crisis … ”
You are not alone in this thought. There are many who agree with you but they either don’t vocalize it in print or have simply gotten tired of commenting against all the negativity of the SL related blogs.
A recent quote worth repeating, “maybe they’re simply doing what they said they’d do”
BTW, if these past few posts are you being crazy, then you will be brilliant in your insanity. {:o)
I’m inclined to believe that they don’t have liquidity problems as well. It surprises me when they do things that would seem to be motivated by liquidity problems though, precisely because I don’t think that those are the cause.
C3 – well, whatever. You and I will never agree. You want tech to just be a tool, I guess, and I don’t mind when tech is a platform owned by someone else.
I don’t tell customers “No, don’t do an iPad app, it’s owned by Apple and we’ll be under their thumb” and I don’t tell advertisers not to get involved with Facebook because you’re at the mercy of Zuckerman.
Similarly, Second Life is a platform, owned by a company, and it has pros and cons. I don’t need to “own” a world in order to assure an enterprise client that it’s a place worth doing business, nor do most enterprise clients care about whether the server is in-house or not.
I’ve been selling other people’s platforms for years. I tell customers the pros and cons, I tell them technology changes, I tell them that the rules of the game can shift. I hope I’ve proven my value over the decades by doing that in a reasoned way.
It’s a ridiculous notion to think that enterprise works in any other way or needs to.
Advertisers and enterprise have been under the thumb of Microsoft’s enterprise suite of products, under the thumb of television stations, under the thumb of magazines who carry their ads. No different and I’ve yet to ever hear you say why I should think any differently about Second Life other than this idea you seem to have that web3D technology simply MUST be sort of, um, freely distributed, simply a tool, and divorced from those evil coercive overlords you keep going on about.
BTW – how are your enterprise sales going? Just curious, since you don’t have the encumbrances of someone whose thumb you’re under?
How many multi-national companies with 100,000 employees exist?
I believe ‘Enterprise’ has to be defined. Obviously the way it was done before was very Oracle-ish, with marketing material presented and the deals secured one at a time. It involved Linden provided hardware setups too, no? I might be wrong.
Either way, they really shouldn’t try the whole five-digit price point thing again, because they aren’t Oracle nor Microsoft, and Second Life as is accomplishes best only being a virtual meeting place which is about the only thing the likes of IBM ever bragged about when touting SL Enterprise. It doesn’t help a corporation with managing product life cycles, human resources, customer relationships, business intelligence and financial management, so on and so forth. Tools like Sharepoint accompliah all of this and Second Life, while neat, only offers the novelty of 3D while there’s more productivity to be had in Google Docs even.
Really, for what Second Life accomplishes, even a 300 dollar tier on a region isn’t worth it for a small business let alone a big 100,000 person corporation. Even as a virtual meeting and collaboration tool of sorts, its overpriced and has less features than say, BaseCamp.
In general, take away the novelty of 3D, what’s the longterm value? Granted I may be harsh in calling 3D a novelty, but I don’t see the $50,000 value in it if thats the sole justification of SL Enterprise having been a product at all. I can get 3D’er with a video Skype call.
There are some things I liked about the Enterprise offering, like the idea of a marketplace. But that brings to light other downsides to Second Life right now; its development platform is fairly primitive being driven by LSL still and all. Programming a mod for WoW has more transferrable skills. Were Linden Lab to swap out LSL for C# ontop of Mono finally, then at least it becomes something employee skills transfer into via the million of Microsoft ISVs and all the programmers in that ecosystem and Mono’s.
There’s a lot to think about, but basically I think:
1. Forget the Fortune 500, target the Fortune 5,000,000. That implies: a. Host the service (which in this case means provide land with permission lists as always). b. Charge tier at more dynamic and scalable rates, starting cheaper. c. Forget ‘Enterprise’ and big-client driven solutions. Linden Lab just isn’t an Oracle.
2. Fix the development platform. Dropping the homebrew sculptmap stuff for meshes via COLLADA solves a whole half of the issue and two years ago I wouldn’t have expected it. Drop LSL next and bring in C#, which I expected 2 years ago.
“No different and I’ve yet to ever hear you say why I should think any differently about Second Life other than this idea you seem to have that web3D technology simply MUST be sort of, um, freely distributed, simply a tool, and divorced from those evil coercive overlords you keep going on about.
BTW – how are your enterprise sales going? Just curious, since you don’t have the encumbrances of someone whose thumb you’re under?”
dusan, enjoy your delusion. you dont see the difference between using a tool, working with a partner, or just wagging a dogs tail and whose leash youre wearing this 5 year cycle…..fine.
your analogies to a pre digital media industry is flawed, and your blog posts in this area…well you said it “off the deep end”. If youd like to discuss the creative services /media industry and whats changed and how over 50 years, maybe one day we can do that.
as to “my enterprise” well mine is a fictional starship named ncc -1701…
as to yours..well.
one day you may awake to find your enterprise as fictional if you continue to believe following “media /software/platform” companies funded by VCs is a sane model for a creative services industry or professional.
My ideas are grounded in the last 25 years.. i have no idea where you find your evidence to the contrary from.
evil overlords?..no just naive or untruthful evangelists who feed a system that isnt sustainable or imo ethical to a broader culture no facing a further increase of virtuality affecting their lives and freedoms.
Dusan –
I totally agree with you.
The enterprise focused companies I talk to — ProtonMedia, Teleplace — can easily pull in well in the six figures for a single corporate virtual world deployment.
And their products are nice — with corporate intergration — but all this can be available in Second Life and OpenSim, as well. In fact, there’s $50,000 product from IBM that has corporate directory integration.
I’m surprised yet that there aren’t $200K-and-up products out yet, with vendors building a more fully-featured product on top of OpenSim, including more enterprise integration (SharePoint), and content management features.
– Maria
@Maria
Sharepoint has actual…value and uses.
‘less I’m missing a whole lot about SL Enterprise, it didn’t do anything in the way of accomplishing what Sharepoint accomplishes, or much of Oracle’s software. Or again, even Google Docs or a host of free tools out there.
http://work.secondlife.com/en-US/products/server/)*
vs.
http://sharepoint.microsoft.com/en-us/buy/Pages/Editions-Comparison.aspx
I mean come on now, 200k? 50k was bad enough for essentially getting a differently limited OpenSim.
I understand the marketing and branding principle of pricing luxury/high, but correlating value can’t be thrown completely out of the window. Second Life Enterprise didn’t fail because it was priced too low and got lost amongst budget enterprise software or somesuch, it failed because it provides little or no value, especially considering what 50 grand can get a company elsewhere.
Second Life isn’t going to work in enterprise because quite frankly, Linden Lab isn’t an enterprise facing company. That isn’t knocking the platform whatsoever, afterall, Linden Lab is the lifeblood of the virtual world platform, but they simply can’t compete in providing solutions in a space where Microsoft and Oracle are competing.
That doesn’t mean Linden Lab shouldn’t continue with their ‘Work’ initiative, but they do need to lower the trajectory some to the broader market of small to mid-size businesses.
RE: corporate packages for main grid estates, Dusan you are exactly right about this. I also agree that the product was left to sell itself mainly, never a good proposition. Finally, SL as it exists desperately needs some features. Distributing notecards at a meeting just doesn’t cut it. At least .doc or .xls or powerpoint ~ seriously. Bloody hell, even my phone can read Office documents, but SL can’t. No excuse for SL not to do the same at this juncture, and put some text up on a prim or something, even if browser based.
And as for the enterprise market… not all companies have an edgy, collaborative core. Sure, some might, in some areas… but the hard truth is that a lot of corporate work is simply not creative on a ‘let’s build a prototype together’ level. The use case might be for a more polished, ‘meeting or presentation only’ sort of scenario. Boring perhaps to the artsy types, but still a real market.
Regarding liquidity ~ it’s well known that companies almost as a rule never recover gracefully, if ever, from layoffs as deep as 30%. Unless that 30% was fluff in the first place, and with Linden Research that clearly wasn’t the case. If those layoffs weren’t the result of a liquidity crisis… it had to be something far, far worse. Perhaps as simple but disastrous as a realignment of goals. For such a young technology company, the analogy would be a kid ditching out of college (and all its expenses) in order to pursue a lifetime career in fast food preparation. Let’s *hope* it was a mere liquidity crisis that brought on such change, considering the possible alternative reasons.
At bottom, like Soylent Green, Linden Research is… people. Not IP, not tech, not assets, but intelligence and strategy and integrity in whatever proportions they can muster. All else is secondary. Lots of companies tried losing their early management personnel and vision over the years ~ Hewlett Packard and Apple for example. We’ve seen how that works out.
It seems that there has been a recent SL history of bringing products to the market before they are fully polished.
Luxury items really have to be a lot better and a lot more expensive for people to sit up and take notice.e.g. the advertising budgets for perfumes.
I think you are absolutely right with Enterprise, everything should be ‘in the box’… a ‘turn-key’ operation…. maybe even hardware rental.
SLE did need more time and continues to need to link to the Main Grid. Let’s remember that they may own everything on the Main Grid but it didn’t cost them anything to create it, so sharing it with the SLEs adds value but just as a selling point. The price point was just about right but you can’t just sit there and wait for people to buy. LL never went to exhibits at tech shows or at association conferences, which should have been a huge market. For instance, having talked to American Bar Association tech people, the biggest problem they saw with following up on the mock court training lawyers received via the SL Berkman campus was that law firms wanted the ability to control access behind their firewalls. LL just did not know how to market the product.
“Let’s remember that they may own everything on the Main Grid but it didn’t cost them anything to create it, so sharing it with the SLEs adds value but just as a selling point”
theres a corporate selling point.. “weve given you over a millions peoples other IP for free”
“now use our service and company to virtualize your business…” uh huh…
frankley id loved for them to try it… and we can finally have a high level court case that will end the web2.0 “free slave” work methods of these companies…. or not end it, legalize it, and we can go back to fuedalism or slavery for “content producer like crop pickers.”
then again, NO IT department ever bought software/hardware that was “fast fun easy”…that more than the cost per license… is how they work…self survival first.;)
Isn’t it a tad bit of revisionist history to imply not enough was done to sell Second Life Enterprise? I guarantee it got a lot more press and public showing than other Enterprise collaboration products that’s in the $50,000 product range.
The problem is, it simply has no VALUE worth anywhere near $50,000. Most certainly not the other wild numbers being thrown out.
Desmond above further illustrated some of the obvious and most simple things Second Life can’t do, like open a document or spreadsheet, do any kind of filesharing whatsoever. Yes you can pass notecards, upload textures, and even use Shared Media now, but that only exasberates the issue that you’re paying $50,000 for the novelty of 3D wrapped around something less functional and less supported than notepad, powerpoint and the browsers we already have.
You gotta take Second Life out of its silo when considering its worth for something like Enterprise, not just throw around price points and repackagings of the same ol’ thing and feel any could be right. At the moment as a business collaboration tool, it does less than free products like a simple combination of Skype and Google Docs. It’s a far cry from even Cisco’s WebEx which is only tens of dollars a month. C’mon, features that lend towards productivity matter, not novelty.
Just to clarify – my post wasn’t about a higher-priced SLE nor am I advocating for its return.