Most Virtual Storefronts Fail

Nine out of ten businesses that have launched virtual worlds saw them fail in 18 months or less, according to recent research from Gartner, which faulted companies for getting hung up on the technology rather than thinking about how people use it.

"Businesses have learned some hard lessons," says Steve Prentice, vice president and fellow at Gartner. "They need to realize that virtual worlds mark the transition from Web pages to Web places and a successful virtual presence starts with people, not physics."

The adoption of virtual worlds for the enterprise began picking up steam this year, buoyed by the success of Second Life, a 3-D environment in the consumer space where people interact with one another as avatars (virtual representations of themselves).

Other consultancies, such as Forrester, predicted virtual worlds would rival the internet in overall importance to businesses.

Many companies implemented virtual worlds to help with internal collaboration, including Sun Microsystems, whose MPK20 provides a virtual extension to the company's corporate campus in Menlo Park.

Despite the high failure rate, the research, which was released at the Gartner Emerging Trends Symposium/ITxpo 2008 in Barcelona, did indicate virtual worlds will catch on as companies understand what types of use cases work best for implementing them.

By 2012, around 70 percent of organizations will have set up private virtual worlds, Gartner predicts. Virtual worlds set up for employees to collaborate internally will have a high success rate because of "lower expectations, clearer objectives and better constraints."

The other upside to virtual worlds for the enterprise: cost. According to Gartner, the cost of implementing a corporate virtual platform averages US$50,000, and cheaper trials can cost $5,000. The report argues this low-cost will encourage more experimentation by businesses.

This story, "Most Virtual Storefronts Fail" was originally published by CIO.

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