Gartner Warns Corporations Away from Public Worlds

"Companies that are sensitive to brand issues, as well as social and ethical positioning, must exercise particular caution in uncontrolled virtual worlds, such as Linden Lab’s Second Life," warned Gartner today. The company advised enterprises and brands to investigate "more heavily moderated, targeted alternatives, such as There, Kaneva and Activeworlds." Steve Prentice, Gartner analyst and Vice President, offered five issues to consider when weighing public worlds: IT-Related Security Risks, Identity Authentication and Access Management, Confidentiality, Brand and Reputation Risk Management, and Productivity. When looking at the recommendations for companies, it's worthwhile to go back and compare them to IBM's guidelines for individual employees.

Gartner made the now much-touted prediction back in April that "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." At that time, our editor pointed out that, only a month before, the company seemed completely in the dark on virtual worlds at the Virtual Worlds Spring Conference.

They've definitely been investing time in learning, hough. In June they made another prediction that, while not a reversal, certainly runs in a different direction. They predicted that by 2010 more than 50 percent of governments would vacate Web 2.0 space and virtual worlds for reasons similar to the ones below:

1. IT-Related Security Risks

IT-related security risks are primarily centered on unverified applications being downloaded to managed desktop systems, and on issues regarding firewall permeability. There are no indications that these
client applications represent a higher risk than other similar applications, but Gartner said that at this time, the high frequency of updates makes the control of a large application difficult.

2. Identity Authentication and Access Management

Individuals interact in virtual worlds via avatars, which are computer-generated representations of themselves. However, because new accounts can be opened with ease (and at no cost), many individuals have multiple avatars. Thus, it's difficult (if not impossible) to ensure that any specific avatar actually represents the person with whom it's associated.  This lack of verifiable identity control or access
management is a major deficiency in public virtual worlds and is having a significant impact on the potential use of virtual worlds for internal collaboration purposes.  Gartner recommends that companies seriously evaluate the availability of "private" virtual-world environments, which are hosted internally and exist entirely inside the enterprise firewall.

3. Confidentiality

Virtual worlds aren't secure environments. Gartner believes that discussions involving confidential and commercially sensitive information shouldn't take place inside Second Life or any other virtual world — or
in an open, internet-supported social-networking site. Worldwide legal systems (especially in the US) have become increasingly aggressive in demanding access to electronically stored records.  By moving to a private virtual world (built by using tools such as GarageGames' Torque Game Engine or Sun's Java-based Project Wonderland); or developed using established applications (such as Forterra Systems' Olive) that are entirely contained inside the enterprise firewall, the issues of privacy, confidentiality and identity can be controlled. Non-US organisations may wish to avoid virtual worlds that are subject to US jurisdiction because this may result in stored information being subject to legal scrutiny.

4. Brand and Reputation Risk Management

Uncontrolled virtual worlds represent an environment fraught with danger for enterprises that are sensitive to brand and reputation issues. Enterprises should exercise extreme caution in their virtual-world activities.  Enterprises that are sensitive to brand and reputation issues should consider confining their activities to controlled virtual environments to minimise (but not eliminate) their potential exposure.

5. Productivity

Considerable scepticism remains regarding the practical benefits of virtual worlds to enterprise activities, with many senior executives viewing them as time- (and therefore money-) consuming diversions that lead to significant amounts of wasted time as well as computing and bandwidth resources. As social networking sites enter the mainstream of daily life for a growing segment of the population, some enterprises are re-evaluating their restrictions on the basis that networking and
collaboration are important elements of worker productivity and morale. Gartner’s take is that productivity may decline during the extensive learning and adoption phases of virtual worlds, but this shouldn't prevent enterprises from looking beyond the initial phases toward the productivity benefits that may ensue.  Whilst unconstrained use of virtual worlds for all staff is probably inappropriate and unnecessary, enterprises should keep an open mind and evaluate trials carefully to avoid premature and inappropriate decisions regarding access and value.

Full press release here.

Comments

[csven]

Companies should exercise no more caution in virtual worlds than they do in the real world. And *that* is where the problem lies afaic: companies have become too used to heavily-controlled media where consumers have little or no voice to complain about the kinds of things companies do in the real world; they could basically do what they wanted without repercussion.

Gartner is, imo, talking mostly to those companies who haven't been very good partners. Only now more than ever it's becoming clear that the market is very much a partnership. And the sooner companies figure that out, the fewer issues I think they'll have going forward.

[Dobre Vanbrugh]

I completely agree with csven. Theres a big powershift towards the 'consumers' and even though perhaps its good to keep a certain level of control over what is published, still one of the major drives between online (social) communities is self expression, self publication and sharing.

Wasnt it Coca Cola who released their trademark to Second Life?

[randolfe_]

More than a bit of wishful thinking, I'm afraid. Consumers certainly have more information and can publish info of their own. Corporations are also being held to CSR standards more and more. But there is also a price to pay for all that. Ironically, brand marketing power is increasing dramatically because of the wild overload of information available to consumers, often of questionable credibility or quality. Certainly, though, the power does not now nor will it ever rest in the hands of Second Life artisans. If for no other reason that because it's simply too easy to undermine or disrupt.

[csven]

@ Dobre - Coca-Cola didn't "release" their trademark. They just got the word out as to how they'd deal... or *not* deal... with infringers.

@ randolfe - Agree; it's wishful thinking. Simply *not* being in SL doesn't prevent consumers from attacking brands they dislike. Nor do consumers have any power that doesn't originate from the company itself.

[Jane]

Gartner does topnotch research and analysis of some technology trends and issues.

However, when it comes to Web 2.0, I'm not sure Gartner's predictions are based on solid enough evidence. For instance, predicting that 80 percent of internet users will be in virtual worlds in four or so years completely ignores the fact that the broadband connectivity (required to be in those virtual worlds in the first place) is available to far fewer than 80 percent of most populations except perhaps Korea and some Canadian provinces.

As to government presence in virtual worlds, I wonder on what data the firm is basing its predictions. There is a small presence in SL now and certainly not large enough to predict that one-half will leave. The more prominent public agencies with a SL presence have given no indication that the risks are as great as Gartner states, and show no signs of packing up their prims and going home.

[Dobre Vanbrugh]

@csven: ok clear didnt follow the whole story, still think they gave a good signal about how they could/would deal with it or..?

[csven]

@Dobre - how Coca-Cola dealt with this issue is in the details. When I spoke with them they specifically requested I *not* quote them... thus avoiding any appearance of releasing their trademark.

Thus, to say they "released" their trademark is both inaccurate and misses the subtle manner in which Coca-Cola deftly - and remotely - handled this issue.

That's the reason I'm being particular here. No offense intended.

[Hiro Pendragon]

Sheer Luddite thinking from Gartner, especially considering Linden Lab recently announced it would open up the server code in 1-2 years. Gartner is showing that they are speaking with a lack of expertise and knowledge in virtual worlds.

[designpolice]

For Hiro and June, csven et. al. - You make great points.
I lose patience when government and statisticians start to give warnings at this still early stage, so we probably need to keep our eyes open. Often these are self interested or defensive positions and not grounded in realities - such as the broadband access issues etc mentioned here.

As for the government - IMO – I think many reps are still using stone tablets and chisel = don’t forget they are the folks who refer to the "Internets" as “tubes"! Some reps prolly don't even use computers with confidence (they have secretaries), so forget about VR.
I *predict* that Gartner doesn’t show much more savvy in this instance. Their recent pronouncements don’t quite seem to hold up - even anecdotally, in this post/comments.
*Instead of warning people off a still nascent platform, Gartner needs to be about learning how it all works as opposed to acting like the music industry and waiting for it to bury them in a maze of… tubes!
Thanks - I'll have that cigarette now.

[kvivian]

Cven said: "There is a small (governmental) presence in SL now and certainly not large enough to predict that one-half will leave. The more prominent public agencies with a SL presence have given no indication that the risks are as great as Gartner states, and show no signs of packing up their prims and going home."

I think some of your readers have missed the point that governments (and companies) can be in Second Life or any other virtual world today simply to get familiar with the issues, concerns and technologies involved. The barriers to entry are low--it's free--and their employees can learn by doing without the expense of formal training! At a certain point, they will just move the game indoors, and initiate a virtual world on a server behind their own firewalls where they can control it securely. So Gartner may be right. They haven't said *individuals* would be logged in from *home* all over the world. It may very well be that 80% of people will have *access* to a 3D intranet, and that access will be behind their firewall at work, even if they don't use it personally.

And while governments may vacate the Web 2.0 *public* space by 2010, that doesn't mean they won't use 2.0 technology that is out of the public domain. The horse is out of the barn and running on virtual worlds. It may just be that serious business issues and governmental confidentiality concerns can't be resolved currently without retreating behind a firewall. Maybe Gartner should investigate what "vacate" means. I doubt seriously that it means ignore the technology.

[Len Bullard]

1. Notice how many of you post with pseudonyms. There is not a strong conviction that this topic merits risking your personal or professional reputations. Your avatar is not your professional identity. It is a cartoon identity.

2. The security issues scale to the transaction types. Some transactions have high value if performed in public venues. Others lower their value by doing so. Qui bono?

3. Real-time 3D technologies of which virtual worlds are a subset are already in use in government systems and security systems. Note these are not typically Kaneva, There, or SL. Note the investments by government-backed venture capital firms in companies such as Forterra and others that specialize in training systems, secure ops, and so on. These are quiet responsible companies that do assure the security and reputations of the users. The government agencies have been involved in the emergence of VR, VW and real-time 3D since their beginnings over a decade prior to the third generation efforts such as SL. They have done their homework and played a prominent role, already have assets positioned and have financed much of it.

Today, the prominent public VWs are floating on a sea of VC capital that isn't being paid back in reasonable time. That makes the current market a bubble. The issue is the emergence of a profit model for these worlds followed by the fire sale of their assets where investors make pennies on the dollar.

I don't think there is any risk the real-time 3D technologies are not here to stay, but as with the beginning of HTML-centric hypertext, the issues to watch are not the social issues or the pundit hype feeding the bubble. The issue is where the basis for intereoperability will emerge dominant. Language-based is what works but there will be a two to three year period of proprietary viewers being pushed to the front as the financial struggles become more prominent and the customers begin to feel the pinch of the costs of the loss-leaders.

Some current lead companies will be acquired or fall over and some prominent infrastructure vendors such as IBM will lose interest once the bubble investments are siphoned away and are not replaced by new rounds or profits. Meanwhile, cheaper alternatives based on peer-to-peer and commodity standards (see X3D) will be proven to be more cost effective, easier to manage, and to have better lifecycle characteristics over the exclusively data-center models.

Gartner is right. Caution is indicated.