The U.S. Dept. of Labor has a program in place, funded by H-1B visa fees, to increase the competitiveness of the American workforce. This program, called Workforce Innovation in Regional Economic Development (WIRED), has an initiative under way in the state of Ohio called the Ohio Valley Interactive Technology Alliance (OVITA). OVITA is focused on developing a creative and academically prepared workforce and establishing the region as a center of excellence and innovation in the field of interactive digital technology, which includes the Immersive Internet.

OVITA works with three state universities — Ohio University, Kent State University and Shawnee State University — as well as community colleges and high schools. As with any publicly-funded initiative these days, leadership has to work very hard to justify how money gets spent. Thomas Stead, the Associate Director for Education for OVITA and former department chair at Shawnee State University, recently shared with me some experiences he has had using immersive technology to positively influence budget decision makers.

Computer and video games are big—and they’re on their way to becoming big in the workplace. According to the Entertainment Software Association, people in 68% of American households play computer or video games. And according to the NPD group, a global provider of consumer and retail market research information, the average number of hours gamers spend online gaming has increased to 8.0 hours per week in 2010 from 7.3 hours per week in 2009.

When you combine this with the fact that people learn—and have always learned—new skills and information by playing games and engaging in competition, it becomes clear that game concepts and mechanics are destined to be transformed into business tools. It is not a matter of if, it’s a matter of when. Games in the workplace can increase engagement and productivity; help employees set priorities, share resources, and meet goals; facilitate team-building; and help organizations discover untapped leadership skills. (For great insights on these and other aspects of games in the workplace I highly recommend the book Total Engagement (2010) by Byron Reeves and J. Leighton Read. Another great book on the topic is Learning in 3D (2010) by Karl Kapp and Tony O’Driscoll.)

InXpo recognizes this potential and is dipping a toe in the gaming waters

InXpo customers deploy the InXpo Virtual Events platform for a wide range of purposes such as trade shows, meetings and conferences, career fairs, learning and training, and persistent virtual offices. Today, InXpo announced a new offering called InXpo Social Suite. This add-on to the InXpo Virtual Events Platform, slated for general availability in early May, will incorporate games and social network integration. The thinking behind this is that by offering increasingly compelling content and activities, InXpo customers (let’s call them hosts) can increase the engagement of users (let’s call them participants), thereby obtaining benefits such as improved knowledge retention, higher customer satisfaction scores, and increased revenues.

InXpo is working with a game design team from Tribeca Flashpoint Media Arts Academy to create a set of lightweight, casual computer games. The first two games InXpo will offer are a trivia challenge and word scramble. InXpo hopes to have 5 or 10 games in its library by the end of the year. Event hosts will be able to configure the games to reinforce learning objectives or advertise event sponsors’ products, for example. The system will track participants’ points and advancement in the game and list high scorers on a leaderboard.

What it means for business decision makers

If you are looking for ways to increase engagement—for example, increase the amount of time prospects spend on your Web site or attending your virtual conference or trade show, or retain employees or customers longer—adding games to your interaction portfolio may be a boon. Especially games that have a strong social element and allow people to compete with each other in a fun, challenging way.

If you feel uneasy about incorporating InXpo’s game elements into live customer interactions, start with internal trials. Perhaps hold an all-hands meeting or a regional sales meeting in the environment and solicit feedback from participants about their experiences with the game technology.

InXpo’s efforts to incorporate games and game mechanics into enterprise software isn’t new; providers of 3D enterprise immersive software have been offering game mechanics in their products for several years. But the launch of InXpo Social Suite is another sign that the market is driving immersive software toward richer, more engaging environments, regardless of underlying technology.

I recently spoke with three business decision makers who have been involved with deployment of pseudo-3D immersive environments in their organizations or for their customers. I spoke with Michael Doyle, executive director and editor of the Virtual Edge Institute; Kate Spellman, senior VP and managing director of UBM Studios; and Caroline Avey, director of innovative learning solutions at ACS Learning Services. We talked about why they are using pseudo-3D immersive technology rather than alternatives.

Pseudo-3D is used for conferences and trade shows—but it doesn’t stop there

When you think of virtual event platforms from companies like InXpo, ON24, and Unisfair, what likely comes to mind is large virtual conferences and trade shows. Here are a couple of examples:

• The Virtual Edge Summit. This conference, which was focused on virtual events, meetings and communities, was held over two days in February, 2010—both online and in Santa Clara, California. Michael Doyle, the executive director of the Virtual Edge Institute, said that 400 people attended in person and 600 attended online.
• COMDEX. COMDEX was a computer industry trade show last held in 2003. The event had become massive, with more than 200,000 visitors and 2,300 exhibitors. UBM Studios will bring COMDEX back this November as an online event focused on the show’s original audience: the high tech channel. Kate Spellman, senior VP and managing director of UBM Studios, said they expect to have about 35 exhibitors and 3,000 attendees.

While large conferences and trade shows certainly represent the bulk of usage to date, we’re starting to organizations use pseudo-3D immersive software software in other innovative ways. For example, ACS Learning Services held a launch event in January, 2010 for a new company-wide innovation program that leverages an idea management system. The company deployed the Unisfair platform for the launch event and now is leaving it up and running, for one year, to function as a portal for employees who want to learn about the innovation program and the idea management system. The idea behind the portal is to enable self-directed, discovery-based learning, a place to launch the program, a vehicle for social-networking to discuss ideas, and a front door to the formal learning via a deep link to both the learning management system and the idea generation system. The Unisfair platform provides a level of engagement above and beyond what people get from just the learning management system and a webinar.

Pseudo-3D technology meets requirements for scale and ease of use

Vendors like InXpo, ON24, Unisfair and others offer pseudo-3D immersive environments that can scale to tens of thousands of simultaneous users by giving participants the illusion that they are in a 3D environment, rather than delivering a full 3D experience. (See the related March 26, 2010 ThinkBalm blog article, “Pseudo-3D is a rising star, keeping barriers to adoption low.”) In a nutshell:

• Hundreds or thousands of event attendees requires a highly scalable solution. About 600 people attended Virtual Edge Institute’s Virtual Edge Summit online, accompanying another 400 who attended physically. UBM Studios is expecting 35 exhibitors and about 3,500 attendees at this fall’s COMDEX trade show. Caroline Avey, director of innovative learning solutions at ACS Learning Services, said, “Because we have 15,000 employees located in 170 countries, there is just no way we could have brought everyone together for a physical launch event.” None of the 3D immersive technologies can support this number of simultaneous users being in the same virtual place at the same time.
• Ease of use sometimes means that browser-based technology is the only real option. At ACS Learning Services, the project team had only six weeks to create the learning objects, design the experience, and customize the Unisfair environment. This required a solution that was simple to configure and deploy. Also, the team had limited insight into the computer setups and Internet access of employees around the globe. This required that a solution that adhered to the least common denominator; it had to be Web-based, with no plug-in.

Hybrid events will move beyond parallel experiences as technology and behavior evolve

A hybrid event is a meeting, conference, or trade show that some speakers and audience members attend physically while others attend virtually. Due to technical complexity and the habits of presenters and attendees, hybrid events are largely parallel events today. Networking activities are segregated: people attending physically mingle amongst themselves, apart from remote attendees. Speakers tend to address one audience or the other (physical or virtual)—not both at the same time.

With the Virtual Edge Summit, which took place in February, 2010, the Virtual Edge Institute has started to tackle some of these issues by:

• Connecting attendees with electronic communication tools. The event producers set up a Twitter hashtag (#ve10) and encouraged attendees to tweet throughout the event. The producers set up a dedicated screen in some of the meeting rooms to display tweets in real-time, and tried to incorporate tweets into the Q&A discussion. InXpo, one of the virtual event platforms used during the Virtual Edge Summit, provides voice over IP integration with Skype, which enabled participants who were attending via InXpo Virtual Events Platform to communicate with each other via text, voice, or video chat. But participants attending via other virtual event platforms, or in person, had no way of joining in on these Skype conversations.
• Attempting to cross the visual divide. The producers streamed video of speakers presenting remotely into the physical meeting room, where it was displayed on a screen. Likewise, presentations that took place on-site were streamed out to the virtual environments. Participants attending remotely could watch live video of the speakers presenting. This visual integration was limited to the presenters only. The on-site and remote audiences had no visual connection to each other.

My take: pseudo-3D immersive technology meets some burning business needs

My conversations with these early adopters confirm what I’ve been hearing from others. First, pseudo-3D technology meets requirements for scale and ease of use. When it’s not practical or possible to bring thousands of people together physically, pseudo-3D immersive technology provides an alternative. Full 3D solutions cannot scale to meet this need (yet). Second, pseudo-3D immersive technology will increasingly be used not just for large conferences and trade shows but other things as well, such as training. ACS Learning Services’ use of the technology as a learning portal is a great example.

And third, while hybrid events are largely parallel experiences today, they will move beyond this as technology and behavior evolve. I envision a time in the not-too-distant future when the walls of physical meeting rooms will be lined with displays showing the virtual audience’s communications (and avatars, when they exist), and the virtual meeting rooms will display not only streaming video of speakers but of the entire physical audience. Communication tools and networking opportunities will be available to all participants, whether on-site or remote. Speakers will become accustomed to having distributed audiences, and will more naturally be able to include them in their presentations and discussions.

As analysts covering work-related use of immersive technologies, we have long wrestled with terminology to describe the trends we are tracking and put some bounds around an emerging software market. We aren’t the only ones; naming conventions continue to be a popular topic of discussion at meetings and conferences (see the Sept. 28, 2009 ThinkBalm blog article, “To cross the chasm, we must close the language gap.”) The question always seems to come back to, “Do we call it virtual worlds?”

Our answer has consistently been no. We use the term Immersive Internet to describe the big picture. 3D virtual worlds are, of course, an important part of the Immersive Internet—but they are not the whole picture. A glaring example is the adoption of pseudo-3D virtual event platforms from companies like InXpo, ON24, and Unisfair. Enterprises are utilizing virtual event platforms for marketing events, trade shows, training sessions, and more—all use cases that are also targeted by providers of 3D immersive software.

The name game is a red herring

The more important issue is, “What do the trends in adoption of immersive technology mean?” Our recent research findings shed light on our position to include both 3D and pseudo-3D in our coverage of enterprise immersive software:

• Look where the money is. In our January 19, 2010 ThinkBalm report, The Enterprise Immersive Software Decision-Making Guide, we sized the enterprise immersive software market at $50M USD in 2009. A substantial portion of this number revenue was from pseudo-3D virtual events.
• Production deployments tell a story. All together, the virtual event platform vendors hosted several thousand virtual events in 2009—InXpo alone delivered more than 1,000 500 and ON24 delivered more than 300. We don’t see any evidence of the pseudo-3D virtual events market slowing down.
• Customers are lumping it all together. The customers who buy immersive technology are placing little distinction between 3D and pseudo-3D (depending on the use case, of course). They want to solve their business problem; they don’t care about the nitty gritty of how it gets done. Many times we have talked with decision makers who are looking at both 3D and pseudo-3D solutions for bringing a few hundred people together for a virtual off-site event.

Pseudo-3D faces fewer barriers to adoption than 3D

When pseudo-3D wins out over a 3D virtual world (e.g., Second Life or ReactionGrid), 3D collaboration environment (e.g., ProtonMedia or Teleplace), or 3D immersive learning environment (e.g., ARI PowerU or SAIC’s Forterra OLIVE), it’s often because the barriers to adoption were lower (see table). (We covered barriers to adoption, and springboards for overcoming them, in depth in the September 23, 2009, ThinkBalm report, Crossing the Chasm, One Implementation at a Time.)

Our take: pseudo-3D is on the rise

• Market forces support an inclusive definition of immersive technology. Some immersive environments are virtual worlds, but an increasing number are not. They are 3D or pseudo-3D collaboration tools, learning environments, or event platforms. We anticipate that over time, the lines between 3D and pseudo-3D will blur. 3D technologies are constantly pushing the limits of scalability and vendors are starting to include measurement tools, while pseudo-3D vendors are going after training use cases and always-on, persistent environments.
• Mainstream adoption will follow the path of least resistance. Tremendous power is built into 3D environments, especially when they are combined with communication and collaboration tools. But technology adoption has to be simple for the end user. A “DIY” toolbox or a super-rich 3D environment may not be the path of least resistance. If pseudo-3D continues to outpace 3D in ease of adoption, this is where the customers will go.
• The technology has to be browser-based—or as easy to use and manage as a browser. Our research has illuminated a number of barriers to adoption of 3D environments that could be circumvented with a simpler, more familiar user interface and streamlined deployment options. Browser technology minimizes installation issues, firewall port issues, and a number of other practical problems. On top of that, browser-based immersive technology fits in with the way people are already working; business applications are increasingly web-based, as are collaboration tools and office productivity software.

At the end of January, Project Wonderland development lead Nicole Yankelovich broke the news that Oracle would no longer be applying development resources to the Project Wonderland enterprise immersive software platform. (For more information about Project Wonderland see the January 19, 2010 ThinkBalm report, The Enterprise Immersive Software Decision-Making Guide.) Oracle laid off most if not all of the Project Wonderland team, which was part of Sun Labs.

In the last few weeks, we spoke with Nicole Yankelovich as well as executives from three small companies Yankelovich cited as third-party software vendors or service providers that offer software products or custom solutions based on Wonderland: Amphisocial, Green Phosphor, and Indusgeeks. Yankelovich is currently working with the open source community to establish a non-profit organization and is pursuing a vision of creating a vibrant ecosystem where third parties can create Wonderland content and contribute to the platform — where people can even distribute entire virtual worlds. But many aspects of Project Wonderland’s future are up in the air.

Our take:

• Oracle’s move to cut Wonderland funding wasn’t altogether surprising . . . Oracle uses immersive software for some internal and customer-facing events – the company has held conferences like Oracle Developer Day and Oracle Enterprise 2.0 online using virtual event platform Unisfair. But the company does not have immersive technology in its product portfolio and has not been a part of the Immersive Internet discourse to date. And in general, we don’t think of Oracle as a company that has a strong history in developing experimental new technology in-house. Instead, Oracle tends to make acquisitions to flesh out its product portfolio.
• . . . Though a role exists for immersive technology in Oracle’s portfolio. With Oracle’s focus on enterprise applications, middleware, and now hardware (with the Sun acquisition), opportunities exist to incorporate immersive technology into the company’s portfolio, thereby massively differentiating Oracle products in the market and helping customers decrease their costs and increase user engagement. Some of Oracle’s opportunities include incorporating immersive technology into Oracle Business Intelligence Applications, for 3D data visualization, and into products like Oracle Beehive or Oracle Communications Converged Application Server, for next-generation unified communications solutions.
• This action does not shed much light on Oracle’s perspective on immersive technology. Oracle may have made the decision to cut funding for Project Wonderland for a variety of reasons. Project Wonderland was an open source project, not a revenue-generating software product; no model was in place for deriving revenue from it. Perhaps Wonderland didn’t have traction in the markets Oracle most wants to pursue — though Wonderland had achieved its greatest traction in the education sector, which is one of the industries Oracle serves. Or it could be that immersive technology is simply too early-stage to pique the interest of the strategists at Oracle.
• Unless Project Wonderland finds another major backer, it will not remain competitive. The core Wonderland project team is working to secure new backing. If the team can pull together a funded organization, then Wonderland may have a bright future. If, however, the core team move on to new full-time positions, then the outlook for Wonderland is grim. Without development resources devoted to the project, Wonderland will be slow to add new core features and functionality. It will be up to third-party software developers, like Amphisocial, to add new features through Wonderland’s module layer. Without backing for Wonderland’s core development team, the project’s competitors — both open source and commercial — will catch up in areas where Wonderland is currently strong, like security features, platform independence, Java support, and audio/video capabilities.
• Loss of major backing has eroded confidence in the Wonderland platform. While Yankelovich said that Wonderland supporters — particularly in the education sector — have stepped up to donate hardware and other resources to the project, these donations aren’t enough to fund substantial new development, marketing, and project coordination. Sid Banerjee of Indusgeeks summed it up this way: “While no big company is backing Wonderland, it would be difficult for Wonderland to compete as an enterprise grade platform. Though we still believe it can thrive as an open source platform for the education sector.”
• Further consolidation is inevitable in this emerging technology market. At the beginning of February, SAIC announced that it had acquired Forterra OLIVE (see ThinkBalm’s posts about it here and here). The market is filling with an increasing number of enterprise immersive software products — we are covering nearly two dozen. We sized the enterprise immersive software market at $50M USD in 2009 — too small to support such a large number of vendors.[1] The business decision maker’s job is hard enough when adopting new technology. Consolidation in the market is inevitable and necessary. There are simply too many vendors in this space for business decision makers to easily choose appropriate technologies.

For Java shops that want to engage in low-cost experimentation, Project Wonderland continues to remain a solid enterprise immersive platform. But given Project Wonderland’s current state of upheaval, we recommend that business and technology decision makers looking for software for a pilot or production approach Project Wonderland with caution unless and until Project Wonderland receives substantial backing.

© 2010 ThinkBalm. All rights reserved.

[1] This conservative number includes only revenue from software licenses and maintenance fees, appliance sales, and subscription fees collected from customers who were using the software for work (as opposed to recreational uses). We did not include revenue from professional services (e.g., custom development projects and implementation services). For more information, see the January 19, 2010 ThinkBalm report, The Enterprise Immersive Software Decision-Making Guide.