New World Newsfeed: 3D Virtual Worlds for Enterprise Use Forecast To Become $8-10 Billion Business By 2014

GigaOM: Enterprise Virtual Worlds to See Real-World Growth

3-D virtual world applications for enterprise use will grow into an industry earning $8 billion to $10 billion in annual revenue by 2014, according to Kris Tuttle and Steve Waite, analysts for Research 2.0, in a paper for GigaOM Pro (sub. req.). They argue this will happen after a critical mass in 12-24 months, after which, the revenue will double year over year. In the full report, the authors list a number of 3D enterprise applications, and handicap their prospects at becoming a leading player in the industry. Second Life is described as a market leader, but Tuttle and Waite report "a good deal of discontent and frustration among enterprise users of Second Life, particularly concerning security and intellectual-property issues, in addition to complaints about ease of use." OpenSimulator gets respectful coverage, and high praise for its open source approach, but, the authors argue, "OpenSimulator is still considered alpha software, which means it is not quite ready for prime-time use in the enterprise today."

Read the rest of my summary here. I agree with the authors' main thesis, though I'm a bit skeptical revenue will reach into the billions of dollars in so short a time. If you're in the enterprise side of virtual worlds, what's your sense?

Comments

[epredator]

That does seem aggressive growth, but given the pressures on business, the need to communicate and the extensive exposure people will have to the basics and general generational pressure.
Opensim does also seem to be coming along very well, with an increasing number of service providers for hosting. Which starts to take it into the sort of real of having a wordpress blog hosted.
If you layer on that virtual goods and software exchange then with the SL economy doing 0.5 billion in user to user this year it does not take many more of that scale to start to make those numbers.
It does then depend if the revenue is for the firms in the space making the platforms, or for the service providers in and around those spaces.
Also there is element of cost saving, reduced travel etc.
If you think how much has happened in the past 3 years with enterprise the case studies saving 300k here and 400k there etc another 4 years of demand and of development should put this in true mainstream.

[Ann Otoole]

So the question will be not when but who will get the influx? White hat companies or little companies run by black hats that refuse to file charges against blatant criminals?

The answer is obvious.

[Mo Hax]

Does 'enterprise' include educational enterprises like universities? If so, yeah, I'd agree, if not, no way, unless you count the walled-garden corporate deployments like Second Life's Nebraska and other offerings. Orange (France Telecom) and companies like them with externally facing virtual world presences continue to drop out or significantly scale back including those with strong SL community integration. It seems like the only companies left in SL are those with very specific needs or products that benefit from 3d space, which, well, makes sense. This shake out has been very educational itself, the conclusion: education and training are the 'killer app' of virtual worlds including Second Life. Universities are gobbling up sim space and corporations report their top use of virtual worlds for 2009 and 2010 is learning and training. All of which is rather puzzling considering Linden Labs recent treatment of the educational community. I'm sure they didn't mean it.

[Iggy O]

@Mo,

You do have it about the killer app: education and training. "Simulation and immersion" are the academic buzzwords I've been tossing about. But it's the same animal. In educational circles, we love those aspects of virtual worlds.

"All of which is rather puzzling considering Linden Labs recent treatment of the educational community. I'm sure they didn't mean it."

And we educators don't really mean it when we talk about leaving SL for Open Sim worlds.

Yet.

[Arcadia Codesmith]

To sell enterprise to mainstream business, you really have to demonstrate benefits that exceed current telepresence and training solutions. My take is that those benefits do exist, and that the tech leaders see them and are responding, but the cultural resistance towards VR for general business apps is going to generate more friction than this forecast accounts for.

(But I claim no particular expertise, so take it as you will).

[radar]

It's not going to happen in SL. It will happen in small, single-purpose VW's that can be controlled more easily and don't have SL's creepy reputation with the general public.

To be totally honest, if I were a business or school, I would be looking outside SL too.

[Designer Lingerie]

This is a good post for me. Easy to read, and simple steps that any blogger can follow. By the way, I like the way you highlight your popular posts in the sidebar – very simple and attractive layout!

[Triston]

Just yesterday my boss (in a large enterprise) asked me to look into organizing a meeting in Second Life. While I am new to Second Life, I think this $8-$10 billion forecast is way too high.

The use of telephone conference bridges and programs like Microsoft live meeting are very effective, easy, and mainstream. While virtual worlds may be the future of collaboration and social networking - not yet. The technology and adoption is not mature enough.

Great blog, I have already found this useful in discovering what SL is all about. Now I am off to try it out.

[Triston]

I think the video in your post - "Why Simulcast a Shareholder Meeting Into Second Life?" - paints a more accurate picture of the current and future use of Second Life (or virtual worlds) in the enterprise.

[Tristin Mikazuki]

That forcast looks more like a pipe dream the growth is far to high.

As far as compaines using SL for meetings? No
webex cost $50.00 one time fee any office machine can use it.. full video with white boards AND its easy to use and set up.
SL wont every be a real busniess platform but they will try to hopefully they will realize it before SL goes the way of active worlds.

[Persig Phaeton]

It causes one to wonder:
If these rather bold predictions come true or even if they come true ten or twenty years later than expected, what impact might that have on the commercial flight industry? What percentage of plane flights today are booked for business trips? How many of those business trips could be more cheaply and easily arranged once the Metaverse becomes as pervasive and easy to use as the Internet?
I suppose there is a precedent we might look towards. Has anyone ever studied the impact of improved telecommunications, conference calling, and web meeting software on the commercial flight industry?

Persig

[Exosius Woolley]

Persig: The impact of improved virtual presence will cause the airline industry to lose money, which will in turn cause them to try to destroy virtual worlds. Watch for commercials touting the benefits of real travel, versus a poor representation of VR.

[Terry Thorpe]

The report ties in exactly with our own experiences within KohdSpace in dealing with organizations who are poised to enter over the next 1-2 years but the problems surrounding the 'Second Life' brand has stopped them so far. A great deal of what is happening is behind closed doors at present.

[Terry Thorpe]

The report ties in exactly with our own experiences within KohdSpace in dealing with organizations who are poised to enter over the next 1-2 years but the problems surrounding the 'Second Life' brand has stopped them so far. A great deal of what is happening is behind closed doors at present.