March 1, 2010

Without financial backing, Project Wonderland’s future is in question

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.

Erica Driver

Erica Driver was a co-founder and principal at ThinkBalm. She is a leading industry analyst and consultant with 15 years of experience in the software industry. She is quoted in mainstream and industry trade press including the Boston Globe, The Wall Street Journal, The New York Times, CIO, and Computerworld. Prior to co-founding ThinkBalm, Erica was a principal analyst at Forrester Research, where she launched the company’s Web3D coverage as part of her enterprise collaboration research. She was also the co-conspirator behind Forrester’s Information Workplace concepts and research. Prior to her tenure at Forrester, she was a Director at Giga Information Group (now part of Forrester) and an analyst at Hurwitz & Associates. She began her career in IT as a system administrator and Lotus Notes developer. Erica is a graduate of Harvard University.