Business in Virtual Worlds, Second Life, Virtual World Platforms

Dusan Writer Off the Deep End: Please Raise Prices on Enterprise

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 :P .

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.


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