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Introduction

This morning the Silicon Valley think tank Churchill Club had the CTO of the currently most popular virtual community Second Life Cory Ondrejka talking about this community.

For those of you who are not familiar what a virtual community is: it is not a Massive Multiplayer Online Roleplaying Game (like World of Warcraft) where people are fighting against each other and gaining points, but more a mashup of a collaborative Web 2.0 platform with SimCity and e-business components in a 3D environment.

The virtual community has currently more then 4.5 Mio members, which Second Life calls “residents”. You can sign up for free, choose a name and an avatar (a virtual character) and walk and interact in this world.  Second Life’s virtual currency is the Linden Dollar (Linden, or L$) and is exchangeable for US Dollars in a marketplace consisting of residents, Linden Lab and real life companies (more on Wikipedia).

How do people use Second Life?

Now how do people use second life? According to Cory, one classical favorite is people going to a dance club, where one user – who could be a kid from Brazil – is the DJ, and the others – who come from all over the world – dance and pay a L$ in the tip jar. You can talk to the people, move around, switch your view and walk around. And the information was not only gathered through surveys, but also through hard facts like where did people go, where did they stay etc.

In an anecdotal form, Cory mentioned more interesting things of how not only indiviuals, but how companies or organizations are starting to use Second Life. As you can buy real estate and build houses, a hotel company first built their new hotel in Second Life and invited other residents to come in. From the interaction and surveys this company made online, they got valuable feedback whether and where the hotel design needs improvement.

Or take Harvard University. Harvard is offering law classes for their real world students on Second Life. The interesting effect was – according to Cory – that online students engage much more. Students said they feel more comfortable to ask questions through this virtual layer than in real life. Currently there are 1,500 educators online on Second Life.

An interesting place is also the space museum, built by engineers from the European Space Agency (ESA). There you can find virtual models of all vehicles that had ever left Earth. Originally built by ESA engineers in their leisure time, they were soon joined by NASA engineers.

Second Life means real business

Second Life also means real business. The monthly GDP for January was equivalent to US$ 60Mio, where $7 Mio were actually cashed into real dollars. One of the major businesses in Second Life is the clothing industry. People want to dress their avatar and distinguish themselves form others. But the fashion fad changes not just twice a year, but every 2 weeks. That means a lot of business. Another business is building houses. Not only individuals are building their houses (and buy real estate), but also US state agencies like the Department of Homeland Security (DHS)  and the Federal Emergency Management Agency (FEMA) rehearse and educate their employees in a Second Life environment like a hospital.

And this is only the “inner GDP”. Another $30Mio is generated in real life by contractors who help residents to e.g. build a representation in Second Life, or code plugins for them. In total there are more than 100 companies offering these services today. Cory referred to this as “outer GDP”.

User population

Cory mentioned that in total 22,000 residents on Second Life make profit, some even can earn their living in their First Life with it. No wonder that the US Internal Revenue Service (IRS) is already looking into this and investigates how to tax the Second Life income.

The median age of Second Life residents is 34 years, and 44% of the users are women. It is also seen that the older users are, the more likely it is that they stay and use Second Life. The demographics is relatively stable and constant, according to Cory.

Linden Lab, the company behind Second Life

Second Lifes (the company that invented and runs that is actually called Linden Lab) business model is simple: they sell real estate. Whenever you want to get a permanent space, you pay an installation fee and a monthly fee for maintaining that real estate to Second Life. For each number of real estate added, Second Life IT has to add additional server-racks. Currently these are 2 server racks per week, with growing tendency.

From a technical point of view users need to install a client, persistency and logic is on the backend. This runs as C++ application on mySQL databases, that generate 100Mio SQL queries every day. A scripting language allows to add plugins and program your own functionality. Which is heavily used by the residents, who add 7Mio lines of code every week. That made Second Life’s decision easy to go open source. Since January the client is Open Source, with the aim to also open-source the servers.

The future of Second Life

As the slowest Second Life metrics double every 3 months, the future of Second Life is seen optimistic by Cory. He gave one specific example for future development that he expects: in the Gulf-region (in the Middle East) young women (in real life) outperform their male counterparts in studies and many other areas. Unfortunately, the society and religion does not encourage them to work. Now what do you do with all these highly educated women? Cory has good reasons to believe that Second Life becomes their chance to escape the restrictions and contribute their talents and skills an a positive way – and generate income for them and their families.

Second Life and SAP?

How do we see Second Life? The example of online classes and online collaboration beyond two-dimensional document based interaction seems an interesting opportunity to enrich the SDN and BPX experience. And we had a demo back in December at the SAP Developer Challenge: A Second Life mashup with SAP ERP. Wait for more to come.

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