Yesterday we examined some of the Garter advice for 2009, and it is that time of year when the analysts release their yearly prognostications. So today we'll take a look at some predictions for the CRM area, which is predicted to see some significant changes, and what could be the beginning of an Enterprise 2.0 push this year. Specifically the predicted trends are going beyond the idea of CRM as defined currently, with the following arising this year:

1. Integration with collaborative applications and social applications, e.g. Social CRM

2. Cloud CRM

3. Modular CRM

4. Price cuts and more adoption of SugarCRM

In terms of CRM product functionality, look for last year's trend toward "social CRM" -- marked by collaboration tools like wikis and blogs within the CRM experience -- to morph into "cloud CRM," wherein CRM applications connect to external social-networking sites like Facebook or LinkedIn, as well as other Web sources, according to 451 Group analyst China Martens.

CRM vendors will also try to boost customer retention by adding new features, Martens said. This need is pressing in the CRM space, where products' core capabilities don't vary much. Salesforce has already made this type of move, introducing a product for content management, for instance.

CRM applications will also become more modular, according to Martens.

"Oracle has started down this path already and many of its peers are looking to emulate its example," she said, referring to last year's release of three Oracle SaaS CRM products -- Sales Prospector, Sales Campaigns and Sales Library -- as well as its CRM Gadgets.

This could have some interesting ramifications for applications such as LinkedIn, Facebook, and even Second Life. Stay tuned.

Source article can be seen here.




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As the economy continues its downward spiral, more pressure is being placed on cost containment, which of course means that funding for new software projects becomes more difficult to attain, and those of us in the tech sector find it more difficult to keep up revenue. At least that is the theory, and while it has some truth, a countervailing truth is that economic downturns also create opportunity for technology upstarts.

Usually I quote reports and releases from Gartner and other analysts, but I'm going to step outside that usual pattern today and quote from an interview with one of the founders of Socialtext, a company which sells into the Enterprise 2.0 space. Those of you who are basing businesses on Second Life will have to trust me, this does have relevance to us.

In the interview, the president of Socialtext, Ross Mayfield, has a couple of interesting observations, that are as follows:

Before the recession hit, enterprises were looking at collaboration as a strategic imperative. It was at the top of their lists for initiatives. I don't think that's going to change. You don't get people to be productive by grabbing someone, shaking them and saying "work harder." You get better productivity by aligning your groups, by having people work together better. So the current environment brings focus, both to vendors like us but to customers as well and where they're going to spend their energies.

This is a point with which I agree. But what about the big guys, IBM and Microsoft? Won't they suck up all the air and leave the rest of us without oxygen?

IBM and Microsoft are too expensive, but that said, I think there will be a shake out in the Enterprise 2.0 space. I think the larger companies, like Microsoft and IBM, are going to have the cost of their implementations questioned with greater scrutiny than ever before... You've seen the studies about trimming IT budgets. In these turbulent times, you need a Software as Service (SaaS) driven model. In that model, you can deploy a tool that will give you strategic advantage without a lot of upfront cost relative to traditional licensed software.

Exactly.


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A couple of weeks ago I wrote about Gartner's assessment that SOA was in decline. One of the interesting aspects of working with Gartner analysis is that whenever Gartner speaks, people either panic or start claiming victory, depending on the conclusions reached in any given report.

However, two things strike me. First, I sometimes wonder if people read the entire report(s), or if they read the headlines and first paragraph only. This would explain the usual reactions to a report, but given that these reports cost money, I have to believe that they are being read in their entirety. Second, and perhaps more importantly, it seems to me that many people read Gartner reports as though they are gospel, and view the reports as coming from high atop Mt. Gartner where the Lords of Analysis deign to tell us what they have determined to be the fate of a market segment.

The truth of the matter is that Gartner is doing analysis and research, and from there coming up with assessments. Those assessments, while meaningful, cannot predict the future with 100% accuracy, and even then, are really more of a point in time check on progress of various technologies. The other thing is that Gartner reports need to be thoroughly analyzed because oftentimes the headlines only tell part of the story. For example, in their SOA report, something which is very important to enterprise 2.0, the headline for the report is:

Gartner Says the Number of Organizations Planning to Adopt SOA for the First Time Is Falling Dramatically

However in analyzing their analysis, I noted this:

The two major reasons that organizations choose for not pursuing SOA are a lack of skills and expertise, and no viable business case.... Even if a valid business case exists, then the required skills are often unavailable in-house, and the costs and effort to develop in-house skills and acquire outside expertise are often daunting.

Now you can interpret the above comment in different ways I suppose, but it seems to me that what Gartner is saying is that there is a skills shortage in this area. That to me indicates opportunity, as opposed to the conclusion that the SOA market space is falling to pieces. Additionally, we're in a recession, so unless you have a really solid ROI and business case, experiments are out.

According to SearchSOA:

However, a look into the survey itself presents a more positive picture of global SOA implementations. The survey found that in 2008, the number of organizations planning to adopt SOA in the next 12 months fell to 25 percent from 53 percent in 2007, but it also found that 53 percent already have SOA up and running.

"Looking at the Gartner findings, it isn't any kind of train wreck, said Dana Gardner, principal analyst of Interarbor Solutions LLC. "Fifty three percent are already doing SOA and 25 percent on top of that are planning to do it in the next 12 months. That's 78 percent. That doesn't strike me as negative.

Given the current global economic climate, Gardner said, it makes sense for late-adopter organizations to continue to defer SOA initiatives.

What does all this tell us? It tells us that Gartner is simply saying that SOA is being viewed through very pragmatic lenses by CIO's, and as such, make sure you have a real business case before pitching an SOA project to the execs.

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One of the questions that is currently in circulation goes something like this: what exactly is Enterprise 2.0? The answer is that it is a far deeper subject that it appears on the surface, and the elevator speech answer is something like: Enterprise 2.0 is the enablement of the agile enterprise through the deployment of the social enterprise.

The next set of questions vary, but one thing that comes up is something like this: are virtual worlds such as Second Life part of the Enterprise 2.0 architecture? The answers are "maybe" depending on your circumstances. I don't mean to be vague, but it is true that it really does depend on what you are trying to accomplish, and to that end we are preparing some courses that will go into the detail of Second Life and Enterprise 2.0, although not necessarily in that order.

However, there are some basic components that apply to Enterprise 2.0 regardless of the decision to use virtual worlds, and those components are solid Web 2.0 mainstays, as shown in the following graphic.



Stay tuned for announcements about the course from which this slide is derived. If you have any questions, please feel free to comment below or contact us via email on our contact page.



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Research firm Gartner has a new report which delves into the topic of Virtual Environments and Security. In the context of this blog, virtual environments are typically discussed as 3d virtual worlds, however a more accurate description of virtual environments are social environments in which 3d can be part of the platform.

It is with this description in mind that we are analyzing the Gartner report, and is the description which applies to all of our work.

For example, we view Second Life as a virtual environment instead of viewing it as a 3d game or 3d virtual world. While all of those apply, we view Second Life as a set of integrated social applications (3d, chat, messaging, forums, etc.) which taken together as a whole provide a full collaborative experience. The experience can be in real time, asynchronous, audio, video, text, or 3d. It just so happens that the primary interface to the Second Life community is via the SL client "browser" which is an immersive 3d experience. However the fundamental characteristics of Second Life are that of a social collaborative platform.

So whether we are thinking about Second Life, FaceBook, or even MySpace, the following thoughts from Gartner are applicable. According to Gartner research director Andrew Walls, virtual environments cannot realize their potential for collaboration, customer interaction and information processing without improved security. According to Gartner, social networks, virtual worlds, and real-time mapping services are examples of some of these environments in which organizations, staff, and vendors will require tools and and new business practices put in place to protect personal and corporate data.

According to Gartner:

Improved security in virtual environments should be a joint responsibility between individuals, companies and service providers. Social software services currently provide very few user-controlled security features and do not provide users with complete control of the life cycle of uploaded data. The security risks currently posed by virtual environments include privacy and IP management, especially as users upload and create information that is stored and traded remotely. Emerging threats from virtual environments include new social network analysis tools that allow easy integration of data from a variety of sources and potential flaws in user interfaces and media formats such as QuickTime, AVI, and mpeg4.

Over the past several months, much of this has been apparent in Second Life. We've seen QuickTime security flaws, we've seen content theft via malicious automation (e.g. copybot), and other mechanisms. We've also seen the traffic system gamed by the use of zombie bots, which have the effect of stealing money from businesses who post advertising and rent business space on sims that are supposedly popular, but are in fact nothing more than a scam. These are some of the security issues that need to be dealt with (although the new Search capability in SL is relying less on traffic, so it remains to be seen if the zombie scam continues to be effective).

Nonetheless, Gartner does view the emergence of virtual environments as inevitable:

Gartner predicts virtual worlds, social networks and mapping environments to merge into highly integrated online environments over the next ten years. Organizations cannot block social networks and virtual worlds, because they will become the base infrastructure for business and personal interaction in the future. Now is the time to build security tools and infrastructure that enable the organisation to benefit from them. Organizations should start now to gain familiarity with virtual environments, review license agreements of sites used by staff, establish security infrastructure controls, and a usage policy, educate staff members, monitor use and assess compliance.

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Research firm IDC has released a report through its CMO Advisory Practice which discusses the topic of marketing budget trends and organizational transformation in the marketing area for tech firms. Although the report doesn't explicitly call it out, the driving force behind the trends are social apps and Enterprise 2.0, and as these practices begin to permeate the enterprise, marketing areas will not be immune to the effects.

As such the future of marketing is going to be based more on collaboration, possibly with aspects of the end user driven characteristics of Web 2.0. The effect will be felt in everything from sales to focus groups to advertising campaigns. Feedback will be immediate and marketing organizations will need to be flexible and agile (for an example of this look at the recent Microsoft ad campaign). That said, here is what IDC has to say:

IT vendor marketing budgets will expand by 3.5% for the full year 2008, below the level of investment increases of the previous three years. IDC analysts are observing that many marketing executives are now exploring broader and more sweeping marketing organizational changes, as they seek to increase the return on their efforts and attempt to get marketing better aligned with the content requirements of sales teams, partners, prospects, and customers.

Richard Vancil, vice president of IDC's Executive Advisory Group, noted some key trends emerging within the tech marketing community. "The 2008 decline in budget growth was expected, given the tech economy. But the real story is behind the numbers: tech marketers are getting more input from all sides that greater transformation is required. Much of the corporate marketing agenda across the tech vendor community is really disconnected with the information or content wants and needs of the key constituents of marketing. The sales teams have never really climbed 'on board' to marketing's agenda. And in IDC's research with technical and business buyers, we see that most elements of the classic tech marketing agenda continue to fall short of how those buyers want to consume information today."

The implication here is that "buyers" are demanding information as opposed to classic marketing presentation (e.g. advertising). This is not to say that advertising is dead, rather, it means that advertising and information sharing and collaboration are converging. As such, tech marketing will require that you work with your customers, listen, and respond to their concerns. Failure to make these adjustments will determine which organizations win and which lose.

"IDC has specific guidance for organizational change," noted Vancil. "We are guiding clients toward an expanded Sales Enablement function with an emphasis on content alignment. We are also advocating that management teams staff and execute a larger Campaign Management function so that unilateral and un-coordinated product marketing can be better tied into integrated themes.

Finally, we are advising senior marketers to consider additional budget shifts. Our latest research shows that only about one-third of the average marketing budget is executed in the field geographies: the rest is centralized within corporate marketing and product-line marketing budgets. Our guidance is that even where these centralized budgets are 'owned' by corporate or product marketers; they should be allocated and 'spent' by the regions. We'd like to see the regional spend figure approach 50% of the total."

What the above quote means is that the model of campaign decisions being made in walled gardens won't cut it anymore. The social aspect of the web means that information sharing is rapid, faster than decision making processes made in board rooms and conference rooms, and if you are not extremely connected with your customers, you are at risk. Web 2.0 has created a level playing field for all, and it is a mistake to think that this same phenomenon will not do the same thing to business models. Those who adapt to these new realities will thrive, while those who do not will waste precious time deliberating in conference rooms and trying to ineffectually apply outmoded top-down approaches. Everything is becoming community driven as a result of the social apps revolution, whether that community is regional or interest-based.

The successful CMO of the future will be the CMO who embraces collaboration.


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Systems Integrator Wipro along with Farmers Insurance has announced the opening of an SOA (Service Oriented Architecture) lab inside of Second Life. If you wish to know more about SOA, see this article.

The importance of a robust SOA capability on Second Life is that it will provide the foundational part needed for Rich Internet Applications (RIA's) to be built and deployed on the Second Life platform. The way to think about it is that an RIA will require connectivity to outside data sources, such as ERP systems, in order to be useful for a business process. A robust SOA infrastructure for Second Life will provide exactly that sort of foundation. For example, it would allow a developer to securely connect Oracle or SAP enterprise systems into Second Life, define a business process, and deploy the RIA to the appropriate end users. And as the Mono rollout matures, this sort of solution will become more and more feasible.

"Farmers Insurance is one of the pioneers in successful adoption of SOA, and this engagement has helped us benchmark new standards in the realization of business benefits from SOA. We are delighted to have our SOA solution lab inaugurated by them," said K.R. Sanjiv, Vice President, Business Technology Services, Wipro Technologies. "This solution lab on Second Life helps our clients understand and deliberate key elements of successful Enterprise SOA adoption through a highly interactive experience."

These types of solutions will help solidify Second Life as a collaborative platform and is significantly different from the previous enterprise approach of attempting to use SL as a vehicle for marketing. As such, this has the chance to provide tangible benefits to businesses of all sizes.

The SOA lab on Second Life will be used to collaborate with customers and partners, host virtual conferences and provide a mutual platform to infuse innovation in various spheres of technology and business transformation.

The SOA SLurl can be found by clicking here

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From Cnet:




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The mobile market is becoming increasingly interesting, not just because of the iPhone, but also because it is increasingly becoming more like a portable computer with phone capabilities than ever before. From the standpoint of social networks and immersive collaborative applications, the potential for change and disruption brought on by the mobile market is huge.

Gartner has issued a report which indicates that worldwide growth in the mobile market for 2008 is expected to be 11%, which compared to the slew of bad news in the economy in general, is excellent news. While the numbers are interesting, let's focus on the five key trends Gartner has identified in this market:

1. Established Vendors Consolidate and New Players Join the Fray. New device vendors, such as Apple and Garmin, are looking to differentiate themselves, while big-name vendors, such as Motorola, face pressure as market shares decline and design innovation becomes increasingly challenging.

Apple's iPhone has clearly been a market changing product. It will be interesting watch how this area continues to change as the iPhone becomes a platform for RIA's.

2. Device Vendors Build Out Ecosystems. This new market will bring changes in relationships between vendors, operators and content providers. Applications relevant to enterprises, such as location and navigation, will increasingly become available directly from device vendors that are integrating GPS into their products.

Again this is where the iPhone is a market disruptor. If Apple can turn the corner on the security issues for enterprise usage of the iPhone, it will be a big winner. It's not clear yet how others, such as Garmin will fare. But it's clear that established phone providers are going to have to follow the iPhone's lead in this area, or else they will suffer in the long term.

3. Devices Makers Will Focus on Removing Complexity for the User.

4. Mobile Devices Increasingly Become Lifestyle Statements.

Smartphones and cell phones have long been some of the most unintuitive devices to use. Again where the iPhone is setting the market pace is in removing complexity in the interface. This allows users to get to applications quickly and easily. As for lifestyle statements, perhaps, although in the enterprise that will be less important. I think the bigger trend is around the social application potential of mobile, and perhaps that is where Gartner is going with this, although I would say that real time mobile collaboration is going to be far more accurate than "lifestyle statements."

5. High-End Device Platforms Become “Field-Refreshable." As cellular technologies become part of increasingly expensive consumer devices, vendors must manage ongoing support, upgrades and enhancement of drives. Because many users will hold onto high-end devices longer, these platforms will need more life cycle management in the form of upgrades and enhancements.

Gartner is dead on here. The iPhone and its ilk are much more akin to being small laptops, and are treated as such with regards to the ability to upgrade software components easily. Whether hardware upgrades a la the venerable PC are feasible with mobile devices anytime in the near future remains to be seen, but it will be interesting to see if demands for expandability of the hardware grows as the software ecosystems grows in complexity and capability.


EDIT: IDC has added its assessment of the mobile market:

The worldwide mobile phone market continued solid double-digit growth in the second quarter (2Q08) as competition in high-end devices heated up. According to IDC's Worldwide Mobile Phone Tracker, vendors shipped a total of 306.0 million units, an increase of 5.6% from the 289.7 million units shipped during the previous quarter and up 15.3% from the 265.4 million units shipped during 2Q07. Total shipments for the quarter were in line with IDC's expectations, even as vendors cited economic challenges and changing demands within key regions.

"Smartphones are still seeing growth rates hovering around 40.0% year-over-year, while the rest of the industry is growing at roughly 10.0%," said Ryan Reith, senior research analyst with IDC’s Mobile Phone Tracker. "However, grouping 'the rest of the handsets' into one category is doing the industry no justice. The rise of the feature phone has created a battle at the high-end of the market, with the main difference between smartphone and feature phone being the high-level operating system. We expect the competition at the high-end will help drive growth within the market and help move volume to higher-end devices."

Regional Analysis

Despite rising food and oil prices, mobile phone growth in the emerging markets of Asia/Pacific continued to be robust. Nokia reported its highest-ever shipments in India amid subscriber increases in rural areas, while domestic phone makers benefited in China. Pre-empting the threat of the (then) imminent iPhone 3G, converged mobile device vendors in the region, including HP and MWG, also took the opportunity to launch their own offerings in 2Q08.

Volumes in Europe, the Middle East and Africa (EMEA) rose modestly compared with the first quarter, and saw healthy growth from a year ago. In Western Europe, LG and Samsung increased market share with new line ups of medium and low-end products, while in the emerging markets of Middle East and Africa growth continued to be driven by sales of Nokia's entry level phones.

In North America, mobile phone shipments experienced a healthy lift from last quarter, with vendors introducing a number of feature phones ahead of the much anticipated iPhone 3G. In many cases, these offered touchscreen, music, or GPS. At the same time, the converged mobile device market grew faster than the overall mobile phone market and accounted for nearly a fifth of total mobile phone shipments.

In Latin America, mobile phone shipments continued to show positive growth. With the recent and continuous migration to newer networks and new services offered by carriers throughout the region, the main strategy for vendors and carriers in 2008 has been to promote and convince current users to migrate from low-end phones to more complex feature phones. In response, vendors launched a number of new models during the quarter.

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Summary: Research firm Gartner is offering up some "caveats" for iPhone usage in the enterprise. It should be noted that in my view, the iPhone is a strong candidate for being part of an Enterprise 2.0 strategy, but like Gartner, I have some reservations that would prevent me from recommending it yet as an essential part of a fully developed SOA/Enterprise 2.0 approach.

You can view the entire post by clicking here.


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Service Oriented Architecture (SOA) is a trend in IT, and is often confused as a technology that gets installed like any other application. In fact, SOA is a new approach to information in that it creates a platform for real time dissemination and consumption of information on the network, which then allow web based applications to quickly be customized for any particular business process. This is the essence of the Enterprise 2.0 vision, which takes social applications and the concept of "mashups" into the enterprise domain, as opposed to the old model of big applications.

The transition into this new model takes time, planning, and evolution. You can read more by clicking the image above, but here's a taste of SOA and Enterprise 2.0:

SOA is not equal to Enterprise 2.0. If SOA is the complete architectural transformation to a service based information topology, Enterprise 2.0 is the new method of operating in a fully deployed SOA environment, and the set of modern applications that are largely driven by and controlled by the business. So the deployment of SOA should happen in a series of stages, moving from a core set of technical services upwards to the end vision of a full Enterprise 2.0 set of services.

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Sun Microsystems hasn't been in the forefront of the tech news over the past few years, but they have been quietly working away on areas such as Rich Internet Applications (RIA's) and 3d applications, all built on their Java technology framework, and labeled JavaFX. While clearly this is aimed at the same general market that Adobe and Microsoft are pursuing vis-a-vis Flash/Flex RIA's and Silverlight, there's another possible candidate that they could aim their sights at: Second Life.

The interesting aspect of JavaFX is that a rollout of 3d applications built on the Java framework would seem to have an immediate edge in terms of integrating with existing Java based deployments in the enterprise, which would solve a number of issues for business solutions around security, data integration, and application integration. In short, the old J2EE deployments could serve as a platform on which the JavaFX RIA's get built, including 3d virtual RIA's.

Where would that leave Second Life? It's difficult to say, but certainly it faces a very competitive landscape. We will likely see Flash 3d RIA's on the consumer side very soon, OpenSim is threatening SL on the server side, Microsoft and Google have early stage deployments of RIA's and 3d, and JavaFX could make an interesting dent on the Enterprise 2.0 side. It will be an area to watch closely. It will likely be 2009-2010 before 3d RIA solutions really make a huge move in the market, so it's going to be difficult to pick winners until more of the dust has settled.








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One of the big areas in the Enterprise 2.0 topology is SaaS (Software as a Service). Although the SaaS model is not completely new, having been made popular by apps such as Salesforce.com, SaaS still remains an area that is yet to grow as one of the top trends in IT, largely because it is dependent on an Enterprise 2.0 services infrastructure (SOA) and governance models to be deployed, and for new vendors to emerge in the marketplace. Nonetheless, we agree with Gartner that this area will grow in importance over the next 3 to 4 years.

One area where growth is expected, but has remained slow, is the e-commerce aspect of SaaS. The reasons for this are varied, but at the core is the issue of integration between the SaaS applications and the various transactional systems within the enterprise (and supply chain). While e-commerce works well in a B2C scenario, B2B has an additional set of requirements which add complexity to the introduction of SaaS models in this area. As Gartner states:

“SaaS e-commerce is a viable solution for some organizations, however, they must make that determination based on the SaaS vendor’s capability to meet their technical and functional requirements, and on the type of subscription payment model that’s offered,” said Mr. Alvarez. “Before pursuing SaaS for e-commerce, organizations should develop a SaaS strategy that accounts for the scoping, evaluation, selection, operation and different architectures or SaaS solutions, as well as determines the organizations comfort level in leveraging externally provided IT applications.”

This all sounds good, but let's take a look at the specific areas called out by Gartner:

- SaaS e-commerce may not be appropriate for some Web sites, and may not provide a differentiated experience — Because the SaaS model has a low barrier to entry, some organizations feel that competitors can sign up quickly and easily with the same SaaS e-commerce provider, and deliver an equal online customer experience. However, organizations that are challenged in their e-commerce IT capabilities (such as lack of budget for people, hardware and software), and organizations that can have e-commerce capabilities without having to obtain hardware and software, find SaaS e-commerce appealing.

Translated: do your homework before deciding to go with SaaS based e-commerce. The decision to do so cannot be made in a vacuum independent of a SOA strategy in our opinion. There are ramifications that will be experienced in deploying SaaS e-commerce, and you want to minimize the impact of the negative issues.

- Uncertainty of SaaS e-commerce integration with other applications — Organizations that aren't familiar with SaaS offerings are uncertain how to integrate SaaS e-commerce with their existing applications and the stability of the integration over time. Although SaaS vendors don't operate in a stand-alone vacuum, some are able to loosely couple with an organization's applications via application programming interfaces, Web services or XML interfaces, while others have specific and tightly coupled integration requirements.

Translated: SaaS e-commerce is great if you are able to get the transactional information systems all properly integrated. Otherwise it may be your worst nightmare.

- Concern about data collection and data ownership issues in a SaaS e-commerce environment — Many vendors claim that all data associated with a client site is owned by the subscriber, but that aggregated data isn't. This belief may vary by vendor, so organizations should ensure that they cover this issue before entering into a contract.

- Some vendors have technical limitations, such a shortcomings in Web 2.0 capabilities — In some cases, vendors focus on providing commodity e-commerce functions (enabling organizations to have basic online stores) to a large audience, while other vendors focus on providing enterpriselike e-commerce solutions for large organizations, which are more aligned with Web 2.0 capabilities.

- Organizations may need IT and non-IT resources to support the Web site — This varies by the vendor selected, because some vendors require the organization to have some IT resources for integration support with back-end systems, and to have business users to manage the products and the site's user interface. Other vendors may provide both of these supportive services; thus, clients must understand their commitments before entering into a contract for the service.

This is another set of issues, and it all relates to the need for EA governance and an Enterprise 2.0 architectural blueprint and plan to be set in place first before embarking further down the SaaS road. The main thing to remember is that whether you call is SOA or Enterprise 2.0, the idea is a transformation in the idea of an IT information architecture from a black box central model to one of a fluid service based model that affects nearly every aspect of your IT architecture. As we wrote about in this post:









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Gartner is reporting that IT spending is on track to remain strong in 2008 and to grow by 9.5% overall this year, this despite the poor economic news in general. IT services spending globally is forecast to exceed $1 trillion by 2012, which is a sign that the focus for technology spending may be shifting away from the consumer and back to the enterprise as businesses seek to modernize and fully develop SOA and Enterprise 2.0 platforms. That said, some of the increase is due to the decline in the U.S. dollar rather than to a large increase in demand, but nonetheless there is an increase in demand.

The overall strong demand for IT services suggests that there will not be major cuts in IT budgets. In fact, Gartner conducted a survey of CIO's in March of this year, which reported that plans for IT spend are slightly down, but still are on a path for positive growth.

According to the report:

This economic period, however unsettling, continues to be very different for IT from the dot-com crash of 2000-2001, when IT budgets took a beating after years of undisciplined spending

Fiscal discipline, including the growing trend of using cheap overseas labor, has meant that IT is no longer the first place companies look to cut costs. Indeed, many projects spearheaded by IT -- like outsourcing and data center consolidation -- are showing the industry to be skillful at saving money. And until things started getting really bad in March, CIOs increasingly were being asked to go out and find ways to make money.

Progress is dependent on IT. Companies might be opting not to upgrade PCs, but to stop automating your supply chain is not a recipe for long-term success.

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BMW announced today that they will be leaving Second Life. They have had a presence in Second Life for nearly two years, and were an early enthusiast about the potential for Second Life and virtual worlds. Their reasoning for leaving is that the platform itself is not yet ready for complex B2C scenarios.

According to Munich Express, who made the announcement to a group this morning:

we felt and still feel that virtual worlds have a big potential, not only in terms of marketing, but a lot of work and development remains to be done. We are convinced that the combination of 3D environment, global communication in real time, the 3D wiki functionality and the creative element can lead to a fascinating experience.

However for a B2C company like ours some elements need to be developed further. An automobile is a rather complex product - at present it is not possible in sl to do a static and dynamic product presentation that you would expect from a company like ours.

From a pure marketing perspective the user base is not big enough yet, then there are the usual copyright issues that you're all aware of. So at this point in time we felt that stepping out from a marketing perspective is the right decision. We leared what we wanted to, we think we have defined the issues that need improvement and we will of course contnue to watch the development because we believe in the potential.

Munich Express went on to say:

If sl develops further in the right direction, there is no reason why we wouldn't come back. Our strategic goal was a bit different, the goal was not to compete with the 'party islands. We wanted to learn how this virtual environment works and to see where possible future applications lie, [and] there is much more than marketing involved in the long run. ...a solution that would enable us to have something running on our own servers.

Photo from the conference:






What all this points to is that SL is probably not going to be the enterprise 2.0 solution, but rather OpenSim will develop as the enterprise class solution. Linden Lab cannot continue to expect that B2B and roleplay can co-exist on the platform without some architectural changes made, however the train has already left the OpenSim station and for Linden Lab the window of opportunity is closing... fast.


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