Technology and Virtual Worlds

Technology sector
companies in
Virtual Worlds

T he Technology sector has been extremely quick to adopt
virtual world strategies. Should this be a surprise? No. After all,
metaverses such as Second Life rely exclusively on technology to
make them work and the population residing inside these worlds
are early adopters.
However, as this KZero case study explains, the beneﬁts and
opportunities available to companies in the tech sector are much
more related to creating communities and personnel experiences
than to the latest technological developments.

Tech Companies in Virtual Worlds: A KZero Worldswide Case Study. Copyright 2006 - 2009 Page 1

What is a virtual world? However, as the chart below left shows, other regions
and in particular Europe, have embraced Second Life.
The World Wide Web as we know it today consists of
In late 2006, Second Life resident numbers broke
static 2D pages. You visit a website and read/watch
through the 1m mark, helped by significant media
the information or media presented on it. Virtual
coverage. During 2007, resident numbers grew by 1m
worlds (metaverses) are different.
per month and now (Jul 2009) the total number of
They are digital 3D environments accessed in real- registered accounts is over 19m.
time that allow people to explore, examine and
interact with the objects created within the world and However, even greater growth has been observed in
importantly they allow people to interact together in a virtual worlds catered towards younger audiences.
shared collaborative space regardless of their Stardoll for example, has over 34m accounts, Barbie
geographical location. Girls over 10m and IMVU over 39m. Appendix one
shows the KZero universe graph, an illustration of the
Second Life was the first glimpse into the future of the size and range of virtual worlds available.
Internet, a future of ‘Places, not Pages’. However, other
virtual worlds such as There, Kaneva, Stardoll and Using Second Life as an example, as explained in the
many others are now available for marketers in this following sections, the unique characteristics of a
emerging space. typical resident has expedited the take-up, and the
range of different countries represented.
Why are virtual worlds growing?
Who is a typical resident?
The most popular commercial metaverse to date,
Second Life, is a global application, meaning that Second Life is not a gaming application. There are no
anyone can become a resident. Initially, North America scores, no ‘lives’ to protect, no objectives and no end-
drove take-up due largely to the fact that the result.
company behind Second Life, Linden Lab is based in
San Francisco. Comparison has been drawn to World of Warcraft, an
extremely popular MMOG (massive multiplayer online
game) but the only real similarity is the fact that they
Rest of World
23% are both virtual worlds.
US Importantly, whereas the average age of a Warcraft
37%
player is 17, for Second Life, the average age is 32. It is
this fact which stimulated the interest in major brands
to consider entering Second Life. Below (next page) is
Europe the age range spread for residents.
37% Canada
3%


The graph below shows the regional breakdown of
fashion-themed world Stardoll.

Rest of World
16%

US
37%

Also of note and further interest to brand owners is
Europe
the fact that females account for 45% of users. A 43%
surprising, yet valuable piece of information. So, a Canada
combination of the average age and gender ratio has 4%
made brands realise that there are benefits to be
reaped by developing metaverse marketing strategies. KZero has in-depth data and research available for a
wide selection of virtual worlds and is best-placed
Further analysis of the demographic profile of to make media planning and virtual world selection
residents reveals that these people reside heavily decisions for marketers across the world.
within the Innovator and Early Adopter groups.
Why are early adopters important?
Pre-December 2006, Innovators were the main types
inside Second Life, but, as explained by the Rogers Early Adopters are tech-savvy, brand sensitive people.
Technology Adoption Curve, Innovators act as a They are educated to a level higher than average and
catalyst for Early Adopters. Whereas Innovators are importantly act as opinion-formers.
very keen to trial new technologies, they have local
Their social networks are cosmopolitan, meaning they
social networks.
have the ability to recommend brands, products and
The media landscape services with influence to their friends, family and
colleagues, across the world - another reason for the
range of countries represented within Second Life.
Second Life aside, marketers now have a wide range
These types of consumers also have above average
of options available to them. And, importantly,
household incomes.
traditional media planning techniques can now be
used to select the most appropriate virtual world for Which companies are in already?
the marketing objectives.
A range of companies across many different sectors
Different worlds have widely different resident bases are already in existence in Second Life. These range
from a geographical perspective as well as different from movie companies streaming their films into
age ranges - as demonstrated by appendix one. virtual cinemas, through to media companies such as

MTV and NBC integrating shows through to apparel In part, this has been a me-too strategy, with
brands such as Adidas and Reebok creating virtual companies entering in order to keep up with some of
stores and automobile manufacturers building virtual the early entrants, but a more strategic reason is based
racetracks for their cars.. on using metaverses as a platform for experimenting
Below are the logos of some of these companies (no and exploring how this platform can be leveraged to
trademark infringement intended). the advantage of the core services oﬀered by each
company.
Experimenting and exploring
As discussed, in many instances tech sector
companies have to have metaverse presences simply
to support their positioning as leading-edge
organisations.
Several of the larger tech sector companies have
adopted a natural, organically explained rationale for
entering Second Life. Cisco explains their rationale as
follows (taken from the News @ Cisco blog):
“For Cisco, it is about the Human Network. Part of that
is becoming part of communities in Real Life, and now,
in Second Life. We opened the Cisco campus to better
explain and show who we are, what we are about, and
how we are powering the Human Network. And, that
means more than just showcasing products (or, giving
away T-shirts and virtual Cisco phones in Second Life).
It means working with the community, becoming part
Is it a no-brainer? of the community.”
An interesting question. Faster broadband speeds,
quicker, more advanced computing power, the
increased reliance of IT to business performance and
the rise of user-generated content have all contributed
to the proﬁts of companies in the technology sector as
well as explaining the recent rise in popularity of
virtual worlds.

So, in many cases it’s unsurprising to see companies in
the tech sector entering Second Life. Im fact, of all the
business categories, the tech sector has seen the most
businesses enter.

So, what Cisco is saying here is that in essence, a principles which have guided Sun since our founding. I
virtual world presence creates a marketing platform to see virtual worlds like this one as the next evolution of
demonstrate their services. 'The Network is The Computer.' Second Life is a
community built entirely on participation, and while
Other tech companies explain their rationale in a
slightly diﬀerent way. Shown below is a statement this is still an experiment for us, we're jumping into
from Siemens, relating to their UGS PLM divisional Second Life with both feet because we see the online
Second Life presence (taken from the Siemens world's unlimited potential for collaboration on
Innovation Connection). everything from social issues to Java technology
development”
“Collaboration is the core of PLM and the heart of how
UGS PLM Software does business. To enable This positioning is further supported by the message
collaboration through Global Innovation Networks, UGS communicated when you visit the Sun venue in
PLM Software develops and leverages 3D modeling, Second Life:
visualization, and collaboration technologies. Virtual “A singular vision - "The Network Is The Computer" -
environments like Second Life are a natural and exciting guides Sun in the development of technologies that
extension of these technologies. Through Siemens power the world's most important markets. Sun's
Innovation Connection, our customers and our partners philosophy of sharing innovation and building
are experimenting with these new collaboration and communities is at the forefront of the next wave of
visualization technologies. We are working together to computing: the Participation Age. Sun can be found in
explore how these technologies can be utilized to more than 100 countries and on the Web.”
improve business processes and innovation. Siemens
Innovation Connection also provides an exciting way to So, is simply being in a virtual world enough? By
share some of our customer’s innovative products.” making a public statement full of good intentions,
does this imply there’s a clear strategy in place? No, it
doesn’t. Companies should not view an entrance into
the metaverse space as purely a PR exercise because
the residents in Second Life (in particular) are far to
clever to be fooled by these types of motives.
Instead, as explained in the following sections, virtual
worlds can be used in a variety of ways, many in
conjunction with real-world activities.
Product launches and events
‘Collaboration’, ‘Community’ and ‘Experimenting’ seem
to be key words used to describe the strategies of Companies across all sectors annually spend millions
companies in this sector. Here’s a similar statement of dollars on product launches. These events are
from Sun Microsystems Chief Researcher, John Gage: designed to create as much awareness (buzz) as
possible about new products and services.
“Second Life is creating new possibilities for
communication, sharing and community-building – all

One of the main drawbacks of real-world events is The mainland consists of three large virtual land
geography - it’s not always possible to attend events masses where the vast majority of Second Life land
due to other commitments or time restraints. owners reside.
However, the advent of virtual worlds allows people
from across the world to meet in a shared real-time The benefit of this type of approach is audience reach.
environment, meaning that the concept of virtual The typical approach of having a dedicated corporate
product launches and events is definitely worth island (off the mainland) typically means more space
exploring. to develop virtual spaces but the downside is the extra
effort required to encourage visitors to teleport to the
In October 2006, Sun Microsystems became the first venue. Having a mainland presence means a potential
Fortune 500 company to hold an in-world press for higher traffic and therefore greater awareness of
conference. The event itself was to open the virtual activities.
Sun Pavillion in Second Life and was hosted by John
Gage (mentioned previously). Specifically for the Vista launch event, a real-world
concert was streamed onto virtual screens,
Other companies are now choosing to use Second Life
accompanied by billboards and other exhibition type
to launch specific products. An example of this is
support collateral.
Microsoft.
Other companies using Second Life for product
launches include UGS, AMD, Sun and Xerox.
UGS (like most tech sector companies in Second Life)
has a virtual auditorium to cater for product launch
events. These venues not only allow guests from
around the world to virtually attend, but also allow
the presentation in-world of real-world products
They decided to run a series of launch parties in recreated virtually, as shown below right in the Sun
Second Life to promote the European release of Vista. Microsystems conference centre.
Rather than build a single dedicated venue for this But, not everything needs to be recreated from scratch
launch, instead, Microsoft opted for ten different in-world. As shown above (right) with the AMD Live
venues across what is known as the ‘mainland’ in image, it is easily possible to import existing artwork
Second Life. and marketing imagery into Second Life to create
virtual displays.
Taking this idea one stage further, a concept known as
‘Simulcasting’ describes the simultaneous
broadcasting of an event across more than one
medium.


Xerox used simulcasting to broadcast a real life event
Service channel
at Fenway Park, Boston live into their venue in Second
Life. Using this approach can widely open up the Should we be surprised to start seeing virtual worlds
potential audience for real world events, providing a used as a customer service channel? Absolutely not.
video screen in Second Life viewable by avatars. After all, channels such as websites, email and instant
messaging already augment more traditional
Furthermore, functionality permits avatars to actually methods such as telephone support.
participate in real world debates and presentations. In
May 2006, Nic Mitham (K Zero) delivered a One such company testing Second Life for customer
presentation to an audience of marketers in Turin, Italy. service is Dell. In July 2007, they announced a trial in-
The event, Mondi Virtuali, held at the Virtual Reality world offering tech support assistance for 10 hours
and Multi-Media park had a Q&A session following per week. The trial was designed to gauge demand as
the presentation included questions asked by avatars well as query handling. This process actually involves
from the virtual conference hall, answered using audio making nominated Dell personnel avatars available in
and video streams taking live from the event. designated Dell areas.

PA Consulting also offers customer service of a slightly
different type. Visitors to the PA Consulting island in
Second Life are met by virtual greeters. These people
are present to meet visitors, answer questions and
take them on tours around their facility. What is
different about PA’s approach is the fact that they have
outsourced this service.

Expect virtual events and launches to be a common Rather than assigning real-world employees to this
occurrence in the very near future. project, they pay (in Linden Dollars) third party
individuals who are on standby during the day. This
Already present at many Second Life venues are event provides an extremely low-cost alternative for
boards and other devices used to publicise upcoming companies wanting in-world presence. The KZero case
presentations and talks. Shown above right is such a study The 7 Point Plan for Marketing in Second Life
board on Cisco island.

explains the beneﬁts of having personnel available in- By this, Claus was referring to the fact that avatars are
world. able to interact with company information of a visual
interactive nature. It would even be possible to direct
The leader/evangelist for virtual worlds at PA customers to streamed in-world video showing
Consulting, Claus Nehmzow told K Zero an interesting solutions to their queries or teleport them to areas
story relating to their service outsourcing... dedicated to their product or service.
Recently, voice communication was made available in
IBM is another company embracing virtual customer
Second Life (3D voice), allowing avatars to speak in
service (and virtual worlds in general). IBM has a very
real-time to each other. When asked about the
large footprint in Second Life with many islands
potential for voice in the context of virtual customer
serving a range of purposes.
service, one of the rostered third party agents pointed
out the fact that they were actually deaf. The IBM Business Centre is their dedicated venue for
providing support to customers and prospects. It
includes a Support Library containing a wide range of
manuals and references including the Red Book range.

Up to this point, this fact was not known and in fact,
why should have been when communicated to date
had been conducted via text? In Second Life there are
no disabilities or ailments. As a further demonstration of IBM’s commitment to
virtual worlds, the Business Centre as manned 24
Some schools of thought think that virtual service hours a day from Monday to Friday with nominated
channels could actually pose a threat to conventional personnel.
call centres. A Silicon.com article titled ‘Could Second
Life kill oﬀ the call centre?’ presents the argument that
meeting company representative in a virtual
environment is actually a more engaging experience
than waiting on the telephone.

Claus Nehmzow was asked to comment on this article
and responded as follow:
“The waiting period can be so much more
entertaining than with an IVR system”


Partner/developer channel Autodesk Island is part of a wider initiative, Autodesk
University an online resource for users of their
Another channel being examined on an augmented software.
basis in virtual worlds is the Partner/Developer
audience. The island itself includes regular events, downloads
and opportunities to participate in beta trials of
Several companies are already using Second Life to upcoming software and focusses hard on the
provide outreach to third parties. One such is Microsoft collaborative aspects of virtual worlds.
with their Visual Studio Island. The island was created
to support programmers using the Visual Studio
software range and features a sandbox area (a
dedicated piece of virtual land where anyone can
create objects) as well as a launch competition.

Intel has also entered into this category and is using
Second Life to communicate with developers of
multicore, manageability, and mobility technologies
with the presence of Intel engineers and experts (with Another part of the island contains a showcase/demo
‘Meet the Experts’ events). area of what is possible using Autodesk products, with
real-world products recreated virtually.
In a similar fashion to Microsoft, Intel is also using the
competition mechanic to increase awareness and
interest in this initiative. Speciﬁcally, they ran a
‘Braniac Warbots’ contest, where developers will be
able to use the Second Life standard Linden Scripting
Language (LSL) to build robots that compete.

Scott Apeland, Director of the Intel Developer Network
commented:
Sales channel
"We see that Second Life is becoming a popular area for
our audience, it provides a new, rich environment for Let us not forget that in many ways, Second Life and
training and exchanging information as well as other virtual worlds oﬀer a marketing channel to
entertainment. As the developer base grows in Second potential customers. So, just as some companies are
Life, we want to be there and grow with them and experimenting with customer service and third-
provide the information they need to get the most out parties, others are exploring its role as a sales and
of Intel platforms." marketing platform.

Visual software company Autodesk is using Second
Life almost exclusively as a developer platform.


Other companies also make use of their Second Life
presences to promote their product ranges. This
typically involves 6-sheet type displays carrying
product imagery, hyper-linked out to relevant website
pages. Below are some examples of this approach.

Dell is a great example of taking this approach. Their
Dell Island features a factory room where avatars can
configure and order the Dell XPS hardware range
(both real and virtual).

Ro Parra, Senior VP and GM for Dell's Home and Small
Business Group was quoted as saying:
“It will tell us what we're doing right and will tell us
what we're going to improve. So we asked ourselves
how to extend this relationship with the customer to
create a different experience. We want to be where
people are gathered and they're gathering on the Web
in growing numbers.
For the first in-world resident to order their PC from us, Tax software company H&R Block also uses Second
they'll get it for free. We asked ourselves if Second Life Life as a sales channel. Encouraging integration, they
customers want to build a virtual PC and want to get it sell (for L$100) a virtual product bundle including a
delivered in real life. We think some of them will." license key providing access to one of their products,
Tango.
Dell Island also includes a super-sized version of the
Dell XPS 710PC. Avatars are able to fly inside the The Technology sector is not the only category
computer and interact with various elements within it. exploring ways of integrating virtual worlds into their
Consider this in a way product placement.
Sales and Marketing operations. However, due to the
incumbent technical profile of the early adopter
population in Second Life, this sector more than
others (at this stage) is the most appropriate to
examine this mechanic.


In addition to providing product information on a Commenting on this initiative, Louis Vong, VP of
static basis in Second Life, some companies choose to Interactive Strategy said:
deliver in-world presentations, or ‘SLeminars’. "TMP believes the recruiting process should reflect
Typically these involve bringing in product experts to what's going on in business -- which is going digital."
deliver presentations in virtual auditoriums as well as
facilitate Q&A sessions with attendees. The first event for the North American marketplace
included companies such as Verizon, Ebay and HP.
Recruitment
Tech sector companies were very quick to realise that
not only does the audience inside Second Life contain
potential customers but also potential employees.

Not only are tech sector companies themselves using
Second Life for virtual interviews and recruitment
events but also real-world recruitment companies are
starting to use this space as an extension of their other
recruitment-led activities.
Then followed a European based event with
The best example of this emerging technique is TMP representatives from Alstrom, Areva, Capgemini and
Worldwide, a global recruitment advertising company. Unilog present to meet potential candidates.
TMP has already even several regionally based
recruitment events in Second Life. They have branded Following the lead set by TMP, Australian and New
this initiative ‘Network in World’. Zealand based IT recruitment company Sapphire
Technologies has also entered this space. The company
is now offering access to podcasts on IT employment
topics as well as arranging meetings with virtual
recruitment consultants.

Clearly this is a very new field with a learning curve
for both interviewers and interviewees. Recognising
this, TMP provides participants with training on how
to interact during a virtual interview as a supporting
website to manage the respond and interview
booking process.


Commenting on the launch, Malcolm Dunford, Chief available on-demand technical content and training
Operating Officer of Sapphire Technologies said: for software developers. Shown below is an Intel
discussion on Advanced Ajax programming.
“This is an exciting step for us as a business as we
continue to innovate in the way that we connect with IT Intraverses
professionals, and give our candidates greater choice in Virtual worlds can also be used for internal uses. This
how they choose to engage with us,…. types of venues are very useful for providing
…Our goal is to create a new Second Life community metaverse environments for employees to learn and
of IT professionals in Australia and New Zealand, who interact.
visit the virtual HQ to experience ‘Sapphire Life’. So as Xerox took this approach with Second Life building a
well as offering practical advice such as podcasts on private venue called Xerox Innovation Island,
duty of care for IT contractors, or providing a new space explained as follows:
where people can be interviewed, the site includes “The Xerox Innovation Group (XIG) explores the
features that are purely recreational, like the sandbox unknown, invents next-generation technology,
and the pool table.” architects product platforms, manages intellectual
property, and creates new business opportunities
Training through its research centers and associated operations."
Another logic step following on from developer
outreach and customer service is virtual training. A trend likely to continue in popularity is the concept
of taking company intranets in-world to create
One company, Thomson NetG already provides Intraverses.
enterprise software training courses via the Web and
was quick to implement a virtual training presence in NPD and showcasing
Second Life.
The highest graphical and interactive nature of
Their in-world campus contains classrooms, labs and metaverses lends itself extremely well to visualising
communication centres staffed with mentors and and showcasing new products and services.
trainers. In addition to providing in-world avatars for
PA Consulting has used this method to excellent effect
assistance, NetG has used collateral such as streamed
audio and video presentations and podcasts. and actually has three Second Life islands dedicated to
showing demos and examples of new business
Intel also provides training in Second Life via their applications.
Software College and Dev Zone. The company makes


A virtual bank is being used to test different layout
configurations. A virtual BP garage has been created
to show where underground pipes and tanks are
strategically located.
Also present is a racetrack explaining the rules of
betting as well as an airport to demonstrate check-in
procedures.
IBM has also leveraged Second Life to demonstrate
new product applications. One example is this relates
to their involvement in providing measurement tools So, in the context of virtual words, this type of project
and analysis for real world tennis events. is a perfect fit. On Cisco Island, the Connected Home is
been recreated in order to visual demonstrate the
Already they have integrated real-time matches from features, such as accessing a central media library and
the Australian and French Opens as well as view and control security cameras.
Wimbledon taking data obtained from the HawkEye
system. As shown in the Competitions section later in this
document, products, services and other initiatives can
be integrated into other activities of a more
promotional nature. Cisco has done this with their
‘Connected Life Contest’.
The Siemens Innovation Connection on UGS island is
another showcasing example.
The venue contains recreations of real-world product
development solutions including the JCB Dieselmax, a
car that broke the land speed record for diesel-
As part of their overall strategy in Second Life, Cisco powered cars (at over 350 mph).
decided to showcase their ‘Connected Home’.
The Connection Home is Cisco’s consumer vision of
how the role of the network will impact and influence
technology in the home. The project also involves
Linksys and Scientific Atlanta.

Also projects shown include to Hendrick Motorsports
Nascar which uses NX software (UGS’s digital product


development solution) and Teamcenter software (a
PLM product).
Promotions and competitions
In addition to using strategic rationale to explain
virtual world activities, some tech sector companies
are also deploying tactical initiatives, mainly in the
form of promotions and competitions.

The ‘Intel Ignites OCC’ promotion was a tie-in with real AMD has also pushed into this space with its
world activity. Intel commissioned Orange County Developer Outreach programme. This is at AMD Dev
Choppers to build a bike in celebration of Intel’s 30 Central Island and is a three month treasure hunt for
year anniversary. On the island, avatars are able to developers who will be entered into a competition for
create their own custom bikes to ride across Second a Dell E521 with an Athlon 64X2, 4GB of DDR2
Life. There’s also free bikes already built available for memory, a 320GB hard drive and a 20-inch
visitors. widescreen monitor.

The use of competitions and other similar incentives is Metabranding
a mechanic used by many real world companies in
Second Life, typically about a month after the launch As virtual worlds continue to grow in population size
of their venues. and brand presence, brand new business models will
be created. This will be driven by the demand for
Another example of a contest is Cisco’s Connected Life virtual products - Metabrands. Metabrands are
- a promotion encouraging the generation and products and services created purely for virtual
submission of innovative ideas for a connected life. A consumption.
ﬁrst prize of $10,000 USD and runner-up prizes was
This is a key area that tech sector companies should
made available.
focus on. Over and above looking at metaverses such
as Second Life as communication channels for real-
world services, they should closely examine how to

re-position their expertise to deliver metabrand Xerox
applications. TMP
Thomson NetG
One company is this sector is already exploring the Sun
concept of Metabrands. Sunbelt Software is a real- Sunbelt
Philips
world provider of anti-spyware/malware and email
PA Consulting
security solutions. Microsoft
In addition to the expected features such as a virtual LogicaCMG
Intel
office and auditorium, the venue provides virtual tools
H&R Block
for visiting avatars. This is where a prime example of a IBM
Metabrand can be found. Sunbelt has created a Dell
Second Life security door application that allows Cisco
people to control the access to the properties they Autodesk
AMD
own in Second Life.
Amazon
The creation of Metabrands is one of the key future 0 5 10 15 20
revenue streams for all companies and particularly The average in this category is over three venues, with
those in the tech sector. IBM stealing the show with 18.
Furthermore, the actual buildings created on these
Is bigger better? islands are much larger than their counterparts in
When companies are considering entering a virtual other business categories. This is most likely explained
world such as Second Life, one decision to be made is by an objective of creating the perception of
how to visualise and create their company dominance in a newly charted territory.
environment. Shown below are two examples of ‘going-large’ in
Across all business sectors, the typical metaverse Second Life.
deployment involves purchasing a single island off the
mainland. On it there is typically a main office area
and an auditorium.
Interestingly, tech sector companies have adopted a
‘bigger is better’ approach. Bearing in mind the
average number of venues across all sectors is one,
look at the graph below showing venue counts for the
tech sector.


largest opportunity for all these companies is the
prospect of leveraging real-world expertise in order to
create virtual services and products purely for
metaverse consumption. We will shortly be entering
the age of the Metabrand.

In summary
The tech sector has been extremely quick to establish
company presences in Second Life. And, to a certain
extent this decision has been forced on them, in order
to keep up with their competitors and stake early
claims in this new virtual territory.

However, as this case study has explained, there are
several different options available to this companies,
ranging from in-world events and launches, customer
service and sales channels, NPD and showcasing and
recruitment.

For hardware companies, probably the greatest
opportunity, aside from the benefits listed in the
previous paragraph is the platform to recreate their
real-world products in a virtual environment and
therefore allow avatars to interact and experience
them.

Software and solution-related organisations (with
non-physical products) have a different set of
opportunities, the primary one the ability to visually
represent the specific attributes or features of their
services and produce immersive demonstrations or
experiences of them.

For all technology sector companies, metaverses
should be viewed as important future sales and
customer services channels. However, potential the

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