Gartner Warns Corporations Away from Second Life

By Randolph

File this in the "sorry you're late, but glad you're finally here" category.  Gartner, after blindly gushing about Second Life only a few months ago, now says:

Companies that are sensitive to brand issues, as well as social and ethical positioning, must exercise particular caution in uncontrolled virtual worlds, such as Linden Lab’s Second Life

I'm an on-and-off fan of Gartner, primarily because they are often willing to claim expertise in fields for which they have yet to develop such credibility.  But, as in this case, Gartner tends to eventually invest enough research resources that they finally get it right.

We were talking about how corporate presence in Second Life runs directly in contradiction to many companies' CSR statements.  To these companies all Second Life (or any virtual world) represents is a proprietary media platform.  I'd ask, would they also blindly start advertising on the Playboy Channel or position their products in casinos or on pay-per-view adult cable networks?  In effect, up until a couple weeks ago, that's exactly what they were doing every time they paid Linden Research, Inc. for the privilege of advertising inside their software product.

You see, the purveyors of Second Life and other "virtual worlds" would have you believe these worlds are the same as, or the evolution of the Internet.  They are not.  They are games.  They are software products.  They are proprietary and controlled and operated for profit.  They are not public infrastructure, nor are they collaborative, shared resources.  They're just software games.  The one called Second Life just so happens to be popular because it (until a couple weeks ago) allows gambling, computerized phone sex, borderline child pronography[sic], and yes, bilking clueless companies out of a few marketing budget dollars.

The full press release is here (ValleyWag); my highlights are excerpted below with my comments added in braces:

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Corporate Use of Virtual Worlds {ie. Second Life} Needs Careful Evaluation, Says Gartner

Five Major Security and Risk-Management Issues to Consider

Egham, UK, 7 August, 2007 - Media hype and enthusiasm for virtual worlds must be tempered with a realistic assessment of the security and risk-management issues they expose enterprises to, Gartner warned today. Companies that are sensitive to brand issues, as well as social and ethical positioning, must exercise particular caution in uncontrolled virtual worlds, such as Linden Lab's Second Life, and should consider more heavily moderated, targeted alternatives, such as There, Kaneva and Activeworlds, analysts advised.

"The risks enterprises face as a result of their involvement in virtual worlds are real and can be significant. They shouldn't be ignored [...] objectively evaluate the overall situation and offset risks against often-nebulous benefits."

Mr Prentice said that the issues facing corporations could be broadly grouped into five major categories and offered the following advice to enterprises:

1. IT-Related Security Risks
IT-related security risks are primarily centered on unverified applications being downloaded to managed desktop systems [...]

2. Identity Authentication and Access Management
Individuals interact in virtual worlds via avatars, which are computer-generated representations of themselves. However, because new accounts can be opened with ease (and at no cost) {as in Second Life}, many individuals have multiple avatars. Thus, it's difficult (if not impossible) to ensure that any specific avatar actually represents the person with whom it's associated. {ie. inevitable anonymity and associated total lack of accountability} This lack of verifiable identity control or access management is a major deficiency in public virtual worlds and is having a significant impact on the potential use of virtual worlds for internal collaboration purposes. Gartner recommends that companies seriously evaluate the availability of "private" virtual-world environments, which are hosted internally and exist entirely inside the enterprise firewall. {Gartner says don't use Second Life, instead license the platform and operate it privately}

3. Confidentiality
Virtual worlds aren't secure environments. Gartner believes that discussions involving confidential and commercially sensitive information shouldn't take place inside Second Life or any other virtual world - or in an open, internet-supported social-networking site. Worldwide legal systems (especially in the US) have become increasingly aggressive in demanding access to electronically stored records. [...]

4. Brand and Reputation Risk Management
Uncontrolled virtual worlds represent an environment fraught with danger for enterprises that are sensitive to brand and reputation issues. Enterprises should exercise extreme caution in their virtual-world activities. Enterprises that are sensitive to brand and reputation issues should consider confining their activities to controlled virtual environments {in other words, not inside Second Life} to minimise (but not eliminate) their potential exposure.

5. Productivity
Considerable scepticism remains regarding the practical benefits of virtual worlds to enterprise activities, with many senior executives viewing them as time- (and therefore money-) consuming diversions that lead to significant amounts of wasted time as well as computing and bandwidth resources. [...]

Comments

[Mike Brady]

I hop in to Second Life from time to time just to see how it is evolving and to see what is new in there. Believe it or not, I go in to explore those things not related to sex, gambling, and porn. ( That stuff is so Web 1.0 ) Yes, SL is full of these things, but there's also lot more going on in SL.

While I often find Second Life fascinating, I would not necessarily disagree with Gartner's warnings.

But, when you read through the list, could not those same warnings apply to real life? Weren't those also the same concerns that people had about Web 1.0?

I have often wondered what has led serious companies to spend serious money in SL. Perhaps they see something that I don't or Rosedale is just the king of salesmen.

I figure that they are either
1) hedging their bets just in case SL does indeed take off, or
2) they feel that some virtual environment will take off at some time in some form (maybe SL, maybe something else). They are just using SL to gain experience so that they do not have to play catchup like they did with the WWW.

[randolfe_]

(I wrote a response to your comment yesterday but it's somehow disappeared into the /dev/null ether; from what I remember...)

I basically agree with you. My only disagreement is in the Second Life -to- early Web 1.0 adoption.

1. Linden Research, Inc. is a privately held, for profit company. The Web 1.0 was powered by IETF and public domain (not to mention value derived from huge public infrastructure spending).

2. Second Life is proprietary and Linden Research holds closely all the important elements of the Second Life architecture. The Web 1.0 was entirely based upon open standards with low barriers to entry.

3. NCSA Mosaic was an academic-based project that in turn laid the core groundwork for Netscape (and later MSFT). Second Life has no similar, freely licensable core upon which it draws.

Therefore, the entire play of Second Life is a classic proprietary software barriers-strategy. This makes the network effect very difficult to realize unless you are already a monopoly (or de facto monopoly). Mainly because there is too much risk involved with any customers investing resources and time into the platform.

[Mike Brady]

Those are excellent points.

I think that Linden Lab is aware of that problem as well.

I have read comments by Rosedale indicating that he would like to make SL technology an open platform so that it could grow like the internet.

Makes sense, but perhaps that's just wishful thinking on his part.

[randolfe_]

I actually find it easy to believe that Rosedale is sincere in those comments. However, I don't know how he can convince his investors that such an action will produce a return. OSS plays are very hard to monetize, with only a few successful examples.

It's the barriers problem again. OSS by design is a no/low barrier to entry strategy. Unfortunately that also means anyone can eat your lunch at anytime they become so motivated.

I would modify the strategy quite a bit from what Rosedale is doing now (assuming they want to follow the same general course, which I've written elsewhere that I have other issues with).

I would *not* open-source the client. I would turn over the communications protocol to an open process, and I'd completely open source the servers. However, I'd invest very heavily in the client and make a browser-play, with a strong server-product offering.

Linden could run the existing "grid" for a while, maybe even keep it "off-internet" to preserve the little economy facade they've got going there. But the real play would be truly distributing the technology to the web for anyone and everyone to use as they see fit -- no matter how corporate, how restrictive, or how open.

Of course this strategy means throwing out LSL and much of the existing browser pile of garbage, and developing something much more worthy of contemporary computing. I think you could even push the envelop of system requirements -- just like the early browsers did (though there the constraints were largely bandwidth, not GPU power and memory).

Just my unadjusted, unconverted, nominal L$0.02.

[Björn]

That article by Gartner really is not very interesting at all, any moderately skilled IT expert should be able to deal with the cited "problems", and should also have been aware of them without the Gartner article. For example, to verify somebody's identity, you could use the same methods you can use on the web, and link a web account to the avatar.

I don't know why you deem it necessary, after posting several articles with thought out analysis, to gleefully link to that shallow Gartner article.

I think Second Life already provides a good opportunity to explore what works and what doesn't in a virtual world. It would be foolish to bet on it's success, but if you can set up a "business" in a way that can easily be transfered to other (upcoming) virtual worlds, I see no harm in it.

As an example for what I mean by "what works and what doesn't": obviously second life sites are not web sites (yet). Since only a few avatars can visit a given site, shops simply don't scale. Amazon can feel safe in the 2d world for the time being.

On the other hand, I could imagine that recruitment might work. For example the IBM Code Station might attract a few dedicated individuals who go to the lengths to program their robot or whatever riddles they have put up there. IBM can learn a few things about the candidate, and be fairly sure that they know how to code. So they might find good employees that way (just guessing). Given that it probably costs a lot of money to find good people in the real world, perhaps investing a couple of dollars into the SL experiment is not that foolish after all.

[mike]

i've recently started using SL and was just reading some blogs, and noticed you seem to have a real beef with the product. what's your problem? it's one thing to provide critical commentary, and another to blindly bash something every moment you get.

[randolfe_]

obviously second life sites are not web sites (yet).

The parallels between Second Life and The Web are fundamentally flawed. I've enumerated why before. For one, the Web arose from IETF standards, public infrastructure investment, and public university research. Second Life arose from Linden Research, Inc., a for profit, venture funded company selling a proprietary, closed architecture with proprietary, closed design tool requirements.

Second Life will never be web 3.0. The technology architecture isn't scalable anyway.

i've recently started using SL and was just reading some blogs, and noticed you seem to have a real beef with the product. what's your problem? it's one thing to provide critical commentary, and another to blindly bash something every moment you get.

a. Go read some more.

b. Pay close attention to how any critic of Second Life has been treated by The Cult.

c. I'll then accept your apology. My comments are many things, but they certainly are not blind.