Analysts Identify the Five Laws for Virtual Worlds During Gartner Symposium/ITxpo 2007 Emerging Trends, Analysts Say IT Leaders Must Take the Initiative to Innovate
By the end of 2011, 80 percent of active Internet users (and Fortune 500 enterprises) will have a “second life”, but not necessarily in Second Life, according to Gartner, Inc.
Gartner analysts are examining the hype and reality around virtual worlds during Gartner Symposium/ITxpo 2007: Emerging Trends, being held here through April 26. Gartner’s advice to enterprise clients is that this is a trend that they should investigate and experiment with, but limit substantial financial investments until the environments stabilize and mature.
“The collaborative and community-related aspects of these environments will dominate in the future, and significant transaction-based commercial opportunities will be limited to niche areas, which have yet to be clearly identified,” said Steve Prentice, vice president and distinguished analyst at Gartner. “However, the majority of active Internet users and major enterprises will find value in participating in this area in the coming years.”
Meaningful corporate use of public virtual worlds/platforms will lag considerably behind individual consumer use as enterprises struggle to develop appropriate and relevant business models. As enterprise try to define their role in the virtual world, Gartner has identified five laws for companies participating in the virtual world. They include:
First Law: Virtual worlds are not games, but neither are they a parallel universe (yet). The initial reaction of many business leaders when faced with virtual worlds is to dismiss them as a mere “game” of no benefit to the enterprise and something to be banned for wasting compute resources and time. Many of those that see beyond the gaming elements immediately veer toward questions such as “How do we exploit this as a sales channel?” This reaction is equally incorrect and potentially even more damaging to the enterprise. “Growth in virtual worlds is significant but lower than it appears; the overall population of non-game virtual worlds is still small compared to massively multi-user online games (MMOGs) and the totality of community-oriented and niche-targeted environments,” Mr. Prentice said.
Second Law: Behind every avatar is a real person. Gartner said people can’t be fooled by the fantasy elements in the virtual world. There are unwritten rules and expectations for behavior and culture are developing. Enterprise users must consider their corporate reputations.
Third Law: Be relevant and add value. Many commercial companies have established a virtual world presence, but none have converted it into an effective, profitable sales channel. There has been criticism of early corporate entries into the virtual world, Second Life, related to the showrooms usually being empty and lacking atmosphere. While there have been a limited number of individuals who have earned more than $5,000 per year from their virtual world businesses, most corporations will see minimal revenue gains in the market at this time. “Do not expect to undertake profitable commercial activities inside most virtual worlds in the next three years,” Mr. Prentice said.
Fourth Law: Understand and contain the downside. Enterprises face serious questions, such as “Could activities in the virtual world undermine or influence my organization/brand in the real world?” With significant portions of the virtual economy based on adult oriented activities, questions of appropriate behavior and ethics also arrive. In-world behavior can be a problem in public areas; annoying interruptions can range from unintentional arrivals and erratic behavior from new residents whose avatar control is still suspect to misdemeanors such as graffiti, to more-concerted protest activities designed to disrupt.
Fifth Law: This is a long haul. Today’s multiplicity of virtual environments has developed through the convergence of social networking, simulation and online gaming. There are many new entrants, whose stability and scalability are not yet established. There is significant probability that, over time, market pressures will lead to a merging of current virtual worlds into a smaller number of open-sourced environments that support the free transfer of assets and avatars from one to another with the use of a single, universal client.
Gartner recommends that enterprises should experiment with virtual worlds, but not plan massive projects, and look for community benefits rather than commerce. “Find enthusiasts within your enterprise and support them. Understand the implications for access to open virtual platforms from within the enterprise and the risks involved,” Mr. Prentice said. “Despite the concerns within companies, don’t ignore this trend. They will have a significant impact on your enterprise during the next five years.”
About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo: Emerging Trends is Gartner’s premier event focused on the emerging trends, technologies, business models and new management thinking poised to have a dramatic impact on business, the economy and society. More than 2,000 IT professionals from the world's leading enterprises, rely on Gartner's Symposium/ITxpo: Emerging Trends event to gain insight into how their organizations can use technology to address business challenges and improve operational efficiency.
In San Francisco, an integral part of Gartner Symposium is the ITxpo show floor, where the latest cutting-edge solutions will be showcased by more than 80 best-of-breed providers and up-and-comers. There are 11 ITxpo marketplaces, including Application Development & Integration, BI & Data Warehousing, BPM, Data Center/IT Operations, Portals, Content & Collaboration, Outsourcing & IT Services, and Security & Compliance. ITxpo marketplaces are focused areas designed to aggregate solution providers into a specific market and link conference topics to market solutions. Attendees can attend technology company presentations and schedule face to face meetings with exhibitors of their choice. For more information, please visit www.gartner.com/us/symposiumwest.
Gartner, Inc. (NYSE: IT), is the world's leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities and build the successful organizations of tomorrow.
Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We're trusted as an objective resource and critical partner by more than 15,000 organizations in more than 100 countries—across all major functions, in every industry and enterprise size.
To learn more about how we help decision makers fuel the future of business, visit www.gartner.com.
Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.