Linden Lab turns residential; OpenSim embraces business and education

I’ve just read Prokofy Neva’s very insightful post on the official end of Second Life Enterprise — both as a product, as a division of Linden Lab, and, well, as being part of LL’s vision. Prok was very straightforward and asked the question to Philip directly: has SLE been dropped? The answer was “yes”.

So of course we already knew that Linden Lab is turning back to where their core business always was: the residential market. It shouldn’t come as a huge surprise that they would not only close down their enterprise division, but also drop all products related to business.

And it’s not only that — shutting down the Teen Grid, closing the Boston offices and firing Pathfinder Linden should also give us a good hint that Linden Lab doesn’t want the educators, either. I know that Philip has repeatedly said that Linden Lab would still support business and educators on Second Life. Nevertheless, I would say that actions speak louder than words…

I’m not blaming Linden Lab. Business and education where good for PR — back in 2006/7. But, in truth, LL is not really a non-profit foundation. After all, they make money from leasing server space for hosting 3D content. The over 1400 organisations in Second Life are not exceptionally good customers: most have, at most (and on average), just one sim. They contribute little (if at all) to the SL economy. While they’re nice to show off to the media that Second Life means serious business, the truth is, they’re not among the best customers of Linden Lab. Projects are often underfunded. Like most institutional projects, they have a precise and objective timeline: usually, a project lasts for 6 months, then closes down. That’s not because these projects are a “failure” or anything like that; it’s just the way corporate and academic projects work. They have funding for just a specific amount of time. They have a beginning, but they also have an end; few projects are “open-ended” in the sense that they will manage to get funding every year to stay around “forever”.

Since these projects hardly ever make a profit from selling content (or renting land!), few can get back to their respective boards and claim they’ve created a new revenue stream. At best, they can show that they have cut costs. On the research side, they can show a lot of work done for a relatively low amount of money. But they cannot be compared (or even compete!) to the staggering success of Second Life’s most creative content creators, among which (quoting Philip again), a few make “millions of dollars” annually. Most won’t be that successful, but it’s obvious that several thousands can definitely pay their bills, turn SL content creation (and service providing; it’s not just clothes, furnitures, buildings, and scripting!) into a profitable business that allows them to dedicate themselves full-time to it, and also continuously lease regions from Linden Lab. And, as a nice side effect, encourage other residents to exchange L$ at the LindeX to buy their content.

In a sense, after 4 years of panicking about “the big evil corps that will doom all SL content creators and push them out of the grid”, it seems that rather the reverse has happened. Those content creators not only survived the “corporate invasion” — they won the battle. And Linden Lab, for once showing tremendous insight, is standing behind them.

Now, I don’t blame companies and educators either. Being in SL is expensive. Turning a corporate virtual presence into a profitable venue is hard — way too hard for any corporation who has that as a goal — and they have to compete with small independent business owners who know all about SL and are already established. Media splash doesn’t work any longer. Using a virtual presence as a way to attract attention to your services and products is, in general, not very efficient — a few dozens of thousands of US$ spent on Google ads or Facebook ads will gather much more brand awareness than a SL presence. So the alternative that remains for corporations is using SL as a way to save money: for conferences, training, simulation, and similar things that are insanely expensive but part of the annual costs of any company. Justifying the use of SL as a way to keep costs down means that SL will compete not against other virtual worlds, but with completely different technologies, most of them web-based, all of them way cheaper than SL. Except perhaps for simulation, where virtual worlds really make a difference and are hard to be replaced by anything else on the Web, most of the other professional uses for virtual worlds are very expensive to create and maintain, and difficult to upsell to a board eager to cut costs as low as possible.

None of the above should really surprise us much, much less LL’s reaction.

The intriguing thing is that all those corporations, and most importantly, all the universities and research institutes are not dropping SL altogether. Or rather… they are, but they’re faithful to the technology, and they’re turning to OpenSim instead.

Perhaps for the past few years, I would never personally believe that the OpenSim adoption would be so quick, because I admit that I have been stuck with the stereotype that OpenSim was attractive to geeks with too much spare time and no interest in either community events or the content creation economy. Since this group is not that large, I wasn’t really expecting a huge, exponential growth of avid OpenSim users — even taking into account that many disgruntled SL residents would slowly move to a world which is visually pretty much the same, and thus familiar, even though it has far more quirks. It’s not the dozens of thousands of regular OpenSim users that will “threaten” Linden Lab’s revenue from a million active residents.

When universities started to flock to OpenSim, it naturally made sense to me, because of the expensive tier costs. My own company also hosts one grid for a local university, when it was clear that their very-long-term project would require 16-20 sims over a period of several years, and just one month of tier would consume the budget of over a year… not counting with the content creation and research, which would have to been done for free. Most people don’t realise how critically underfunded most universities are (not to mention schools!) — and it’s not just in some countries, it’s almost everywhere. I used to imagine that most would surely have “a few million dollars” to spend on an interesting research project. I was shocked to understand that most might, with luck, get “a few thousand dollars” — on a good year. Since then, I’ve learned to lower my expectations — educators are eager to do a lot of work on virtual worlds, and SL/OpenSim and Unity3D definitely lead the choices right now, but they simply cannot afford the costs.

Universities, by contrast, have cheap labour (comparatively speaking, of course). And they have an advantage: they can partner with each other and with companies to raise funding for projects. Now, as far as I can say, LL was never interested in that kind of arrangement (Unity3D, by contrast, is very happy to do that — they’re even happy to provide their labour and their licenses for free or for a very low price, in exchange for being part of a project with funding, of which they’ll get a share). I believe that the notion that they stay away from that is rooted on their “no favouritism” rule.

So, OpenSim. What’s so special about it? Well, we’ve gone way past the stage where it was a few geeks happily decoding LL’s communication protocol. Nowadays, it’s mostly an endeavour coordinated, managed, and to a degree funded (in terms of labour costs contributed towards it) by industry giants IBM and Intel. Well, perhaps I’m exaggerating (you can read the OpenSim Development Team page); for example, some contributors are former IBM employees but not currently working for them any longer. But they’re certainly behind it, as well as gathering scattered and casual contributions from Microsoft and Novell. And there are a few new companies with a deep commitment to OpenSim, like Deep Think, SpotOn3D, 3Di, Genkii, InWorldz, and so forth. Many are not even listed as “casual contributors” even though they might have developed their own versions of OpenSim to run on their own grids. Some, like ReactionGrid, have an endorsement by Microsoft and IBM — if explicit or implicit, I have no idea — but you can see what their target is from their company data page: research labs, dozens of universities, and an uncountable number of high schools. Why? Because they’re cheap, offer excellent service, and are unconstrained by LL’s crazy ToS — and have Microsoft and IBM as clients. As the old saying goes, nobody got ever fired for hiring IBM 🙂

But there is more to it. On my next article, you’ll see how, thanks to Hypergrid 1.5, independent grid operators can now join their grids, interlink them, allow content to be bought on one grid and deployed on another, by respecting creator tags (which will work across grids) and the original permissions. In effect, the latest protocols are good enough for most in terms of security — most of what you expect to work in terms of permissions is in fact implemented. Of course people can steal content, and it’s as easy or as hard as using CopyBot on the SL grid — there are no perfect systems. But it’s “good enough” for most.

While LL apparently dropped all efforts on grid interoperability, even though the first grid interoperability protocol (VWRAP) has indeed reached draft status for recommendation as an Internet status by the IETF last month (according to plan and schedule), the OpenSim developers have not been idle. So LL wants to be out of the game? Fine. We’ll build our own metaverse instead, one that really allows interconnection as we want it to work.

And this is what OpenSim grid operators — the serious ones, not the kids in their garages with PCs plugged to ADSL connections — are telling their clients: come to the OpenSim metaverse. It doesn’t matter much if you run your own grid or lease server space from a grid operator — we are interconnected, and anyone with an OpenSim account somewhere (even if just on their own home-based OpenSim standalone island) can visit your content. Thanks to Hypergrid teleporting, organisations can now have their own grid, behind a firewall or shared on a co-location facility (or a mix of both!), and jump to anywhere else, and let anyone visit them. Why should they do that? Because some OpenSim grids already have plenty of shops selling content. And, thanks to operators like VirWoX, there is even a currency exchange across grids. You can even get L$ out of SL and use them on other OpenSim grids.

Voice has often been seen as a major advantage of Second Life over OpenSim, but this is slowly becoming a moot issue. There are more voice solutions available under OpenSim than under SL — the most interesting one is that you’re not limited to a single provider, but can actually set up your grid to interconnect voice service with other grids, and, as a bonus, connect to the public telephone system. It’s just a question of software and configuration. If you prefer, you can sign up with the same voice operator that LL uses — ViVox — and get a license to use it within your own OpenSim grid as well. And no, you won’t be able to do voice chats with SL users, but you will most definitely be able to do that with other OpenSim users on other grids too.

And all of this, as said, has the industry giants solidly behind it.

For me this is a surprising turn of events. I was expecting in 2006/7 that SL would become more and more corporate and academic, while OpenSim would remain in the hands of a few researchers, but mostly in the hands of the kind of people who logged in to SL in 2002-2004 — libertarians, artists, open-source enthusiasts, and people with too much free time. Instead, in 2010, the roles are reversed. LL is keeping the residential market and pushing corporations and universities into OpenSim, where the grid operators — and the industry giants — are welcoming them with open hands.

Of course, OpenSim is not perfect. Not by far. In spite of all the progress, it is at least 6 years behind Second Life in stability. When I joined SL in July 2004, SL was already far more stable than OpenSim is today (of course, OpenSim has far more features than SL had in 2004, so the comparison is not completely fair). While the viewer is the same, and even OpenSim-specific things like Hypergrid are neatly integrated into it, so as a user you won’t see any difference, configuring and running an OpenSim grid is not for the faint of heart. It’s very hard to keep a grid up and running with potentially hundreds or thousands of users. It’s just when you start experiencing the limitations of OpenSim that you start to appreciate what a good service LL actually provides — on OpenSim, you can still crash a region easily by just wearing prim hair (even on the latest versions!), and that’s just one of the tiny things that can make it crash. OpenSim is hard to configure for standalone service, but the complexity of managing a large network of thousands of sims, on different co-location facilities, and an array of central servers, is not for amateurs. Not even for experienced amateurs with years of experience running their own Linux web servers and being used to provide free web hosting for their friends out of their homes. And unlike most of the application software running these days on the Internet, you really need to know how to patch code (and there are millions of lines of code in OpenSim, almost all of it absolutely undocumented) to be able to maintain your sims. Of course, as time goes on, this will be less the case, but we’re still many, many years away away from that.

Nevertheless, the trend is emerging: SL for residential use, OpenSim for academic/corporate use. Philip’s latest announcements tend to reinforce the rift more and more. LL will continue to encourage open source development on their recently announced Snowstorm project, but by abandoning all efforts on interop, they’re sending a clear message that they don’t want to be part of the Metaverse any longer. They will just stick with their 0.6 billion US$ market of digital content sales and remain an isolated island outside everything else.

What this means for the next 2-3 years is completely unknown to me. Maybe IBM, Intel, and all the grid operators will find out that LL was right after all, and that not even OpenSim will fill the niche now vacated by LL. Maybe OpenSim will never reach a level of stability close to what Second Life has now, as OpenSim developers get easily distracted with the potential of adding more and more features instead of dealing with stability and security. Or maybe LL suddenly understands that the best way to reach out to the academic and enterprise markets is to be seen as a partner (and an active partner at that) instead of insisting on a supplier/customer relationship of a luxury service. Or, well… maybe LL develops a new model to earn their income, and can offer sims (and customer service!) for a much lower monthly fee, and relegate OpenSim to the research and development niche. In any case, I don’t think that the new LL strategy of “taking the lead in innovation” will matter much, when it’s clear that in one case at least they will not lead: interoperability.

The future is uncertain, but at least one thing is for sure: all the time spent in honing our skills with Second Life will be immediately be useful in OpenSim. If LL folds — which is unlikely! — content creators can simply move all their content to an OpenSim grid with VirWoX enabled, and continue to make their sales there. Costly corporate or academic investments in content and software to work with Second Life can be easily migrated to OpenSim as well. At the very least, it’s a very comfortable “Plan B” — if all else fails, the OpenSim metaverse might not be as good as the Second Life Grid, but it’s the second best choice, and definitely the more familiar one.

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