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(originally published by Booz & Company)


It’s a Virtual World

Slowly, companies are leaving the physical world behind to cut costs, improve communication, and find new ways to collaborate.

Sandra Kearney sat across from me during our first meeting in early 2007. Between us, a bottle of champagne bubbled and a platter of sushi beckoned. I had been interviewing dozens of IBM employees without permission from the company. Kearney (who has since left Big Blue) dropped in on me unexpectedly, wanting to know why I was snooping around; was I writing a book or an article?

I responded that I had stumbled upon a sizable number of IBMers who were using the Internet in an entirely new way, and I hoped to document what could be a complete transformation of the business world. For a moment, her face revealed nothing and she remained perfectly motionless. Then Kearney, at the time IBM’s global director of emerging 3D Internet, began to tell me what the company was up to.

Although it was almost as if we were speaking in person, Kearney and I met that night not in an upscale restaurant but in Second Life, an immersive, three-dimensional Internet platform where people create avatars to represent themselves. In such virtual world software platforms, an individual’s avatar can get together and talk with other similarly constructed digital stand-ins in real time. Kearney, in fact, was in Arizona, and I was at my desk in New York.

Scores of virtual platforms exist on the Internet and are used for everything from entertainment to business to socializing. An estimated 300 million people worldwide have registered for participation in some form of this activity, according to Kzero, a virtual world marketing and development company. In 2008, according to trade group Virtual Worlds Management, venture capitalists and other investors bet nearly US$600 million on more than 60 software producers involved in the fledgling technology.

In most applications, anyone can register for free to create an avatar. An avatar can be customized down to the smallest detail to look like the person operating it or it can veer wildly from the physical reality. Communication is conducted with a blend of text, chat, and mixed media. Translation devices let people surmount language barriers. Data files can be shared instantly. Movement is controlled in real time by the person behind each avatar, and also through scripted animations that allow for increasingly realistic movements — instead of looking stiff and motionless, avatars can shift in their seats, for example, or follow the script cues for other smooth-flowing gestures.

Although viewed as novel and innovative, for much of the past five years or so virtual worlds were mostly pigeonholed by the media and even the digerati as another way to social network — a multidimensional, more anonymous version of MySpace or Facebook. Almost completely neglected was the value of the virtual world as a tool for business, for example, in bringing together global workforces instantly at any time, offering an opportunity for far-flung teams to share and pore over findings, conducting sophisticated simulations, and training new recruits at a fraction of the cost of in-person sessions. IBM estimates that, with an investment of roughly $80,000, it saved more than $250,000 in travel and venue costs for a recent corporate Academy of Technology event and enjoyed more than $150,000 in additional productivity gains, because these virtual participants were at their computers and able to dive back into work immediately at the conclusion of the meeting. Certainly, IBM could have enjoyed similar cost savings by holding these sessions as Webinars or teleconferences — in other words, with people communicating face to face via video, viewing staid exhibits and illustrations — but company executives much preferred the rich and compelling full-motion graphics in the virtual world as well as the ability for participants to instantly share their insights about particular pieces of information and change content in real time.

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  1. How Meeting in Second Life Transformed IBM’s Technology Elite into Virtual World Believers” (PDF), Linden Research Inc., 2009: A case study about IBM’s use of virtual worlds.
  2. Rita J. King, “Power of Collaboration: Manpower’s First Anniversary in Second Life” (PDF), Manpower Inc., July 2008: Documents Manpower’s use of virtual worlds for encouraging and developing a global and nomadic workforce.
  3. Rita J. King, “From the Fire Pit to the Forbidden City: An Outsider’s Inside Look at the Evolution of IBM’s Virtual Universe Community” (PDF), May 2008: A report on the community of IBM employees communicating via virtual worlds.
  4. Virtual Journalism: Inside the Virtual Newsroom of the American University in Cairo,” DancingInkTV (available on YouTube), April 2009: Avatars for eight Egyptian political bloggers and former U.S. Under Secretary of State for Public Diplomacy and Public Affairs James K. Glassman discuss the Obama administration in a virtual interview session.
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