Restructures, ToS and licences

Gwyn Llewelyn replied to my post on the restructuring at LL, and while we differed in some views, she nevertheless raised a point that has taken a while to percolate through the grey fluff between my ears and mingle with something I posted regarding the sudden launch of the heavily revised ToS.

At the time the new Terms of Service came out, I asked if LL might not be putting the paperwork in order, suggesting that they might be moving towards a hiving-off and licencing of the server-side software.

Despite all the soft assurances from Mark Kingdon about the health and vitality of Linden Lab, as circulated in his recent e-mail, could it be that the announcement of the restructuring be a further step in that direction?

If I’m honest, Prokofy Neva spotted the parallel before me; although she takes a slightly different angle.

In the ToS, LL have pretty much redefined SL as software as a service (SAAS). This helps make the platform itself suitable for licencing – letting other companies come in a take on the task of hosting the platform, as I’ve previously mentioned. This benefits LL from the need to invest massively in additional hosting efforts elsewhere (such as in Europe) with the aim of reducing latency. It also relieves them of the burden of supplying customer support services, since this would fall under the remit of the licensees. At the ame time, LL generate income through a licence structure (based on the server count? the number of actual sims?) that also enables them to retain the IP on the software and thus control its development.

Certainly it is doubtful a purely “land sales” model is sufficient to keep LL afloat, and licensing deals have traditionally been far more lucrative to software companies, so I’d be very surprised if a shift towards such a model hasn’t been considered by some at the top of the LL tree.

They could even hive-off the operations they currently have into a holding company, as Prok suggests, which in turn could operate a number of sub-leasing deals.

Again, moving towards browser-based accessibility for the platform (or possibly offering as an option alongside the Viewer) fits this scenario, again for reasons I’ve stated: it encourages those who would otherwise fight shy of “trying” SL to do so, simply because it no longer necessarily requires them to download and maintain software.

The browser approach also increases the potential attraction business and education may have towards SL as a platform. A shiny new toy delivered direct to the desktop within an browser’s existing functionality is far more attractive than buying a “virtual world modelling tool” which requires you to install and maintain a clunky client front-end on every single desktop PC in your office / classroom environment.

Licencing the platform also offers potential benefits for LL’s business hopes: a couple of strategic “partnerships” with suitably focused hosting services could see the development of Justin Bovington’s longed-for “business oriented Mainland”: a secure environment to which companies using Second Life on the business front can meet and intermingle via “shop fronts”, as an example. Again, LL win in that they lose the overhead of running the service, but gain on the licensing of the platform and in the potential consultancy spin-offs.

Turning as well, for a moment, to Mark Kingdon’s e-mail to residents on the structuring, and risking going off-topic from the above speculation.

I’ve previously-suggested that the structuring PR may have been poorly-worded, giving people the impression that LL were going to overthrow the Viewer in favour of a purely browser-based method of access SL when in fact they may have meant the browser option might be in addition to the Viewer.

Mark Kingdon’s letter to users suggests this may well be the case, as he states: By bringing new people to Second Life, and by increasing the ways in which people can interact with the world and with the people, places, and things within it. Note the emphasis. Not “changing the way in which people can interact”, but “increasing the ways” – this really does suggest to me that the browser approach is intended to be in addition to the Viewer.

The very short “goodbyes” as the rumour-mills churn

The names of those “let go” following yesterday’s restructuring announcement are beginning to appear. Pastebin has one of the most comprehensive lists. Whether it in complete or not is another matter. Elsewhere there is much speculation that Cyn Linden and Babbage Linden have both gone – but this remains unconfirmed, while Prok Neva points to Blue Linden is among the casualties and also mentions Cyn.

Running an in-world search, it appears that the speculation surrounding Babbage and Cyn is misplaced. I’d actually have been very surprised if Cyn was on the list of the departed, given her very recent promotion. Similarly, given the mighty work that has been done around LSL and Mono, I would also have been surprised had Babbage gone – and would certainly looked at his departure as a negative portent.

Blue, sadly, has gone; and despite what some may say about him, I personally shall miss him. Despite a rocky start to our relationship, he and I went on to have many private conversations on a range of subjects that convinced me that, while the corporate need may have forced his hand at times (and indeed stifled a desire to provide greater support to users), he had a very genuine love for the platform and the people with whom he interacted.

I have to say that, while I wouldn’t wish redundancy on anyone (I’ve been through it twice myself and I know how devastating it can be), I find myself unable to feel much in the way of remorse at the loss of Pink Linden. Her attitude from day one was autocratic, and despite knowing little about SL or the SLX/XStreet SL environment, she was very quick to unbendingly follow the corporate line where a modicum of understanding might have been more welcome – and more appropriate.

If I’m honest, part of my opinion of her was shaped by the whole XSL Content Roadmap situation – particularly her determination to stifle any and all discussion on the subject at her Office Hours meetings, while at the same time using her real life blog to decry the fact that the owners of her apartment block had opted to cut down some fourteen trees around it without consulting the residents. Pot, meet kettle and please note its colour.

I also did wonder at her potential longevity at LL after a) Jack effectively took over matters of commerce; b) the Content Roadmap was shelved.

Beyond the names, the speculation and rumour mill continues apace with tidings of woe and doom for SL, and a general consensus that the platform is heading for a Farmville type future, or that it is about to become Flash-driven. Many are claiming that Viewer 2.0 and the new user experience have been complete failures and have thus precipitated the situation.

Me? I think it is still too early to judge. Let’s face it, the New User Experience hasn’t been around that long, and there are more than enough issues with Viewer 2 to possibly prevent LL pushing it into the spotlight in terms of widespread external advertising. Indeed, it is hard to see any signs of a concerted advertising campaign across the full breadth of the media that one would assume would be needed to raise SL’s real world profile.

As I’ve previously posted, Mark Kingdon and his colleagues are not stupid.  They may not get Second Life, but that doesn’t make them stupid. They are marketers, and they know the value of advertising. At the moment, Viewer 2 and the New Viewer Experience stand in a vacuum  - few, if any, outside of Second Life have ever heard of them. So is it really any wonder than since their “launch” new numbers haven’t dramatically increased?

Unless, of course, Viewer 2 has been put together in a Costneresque view of the world wherein if you build it, they will come. If this is the case, then I’ll gladly revise my view on the levels of stupidity potentially prevalent in a certain boardroom.

No, current figures on user throughput are simply too fresh to squarely point the finger at Viewer 2, etc., and lay blame. Q2 figures might start to revise this, but even then it might be a tad premature.

So… what has happened? As I said in yesterday’s post, leaving aside the hysteria around the “Web-ising” (or possibly not) of SL and the “Facebook joining”, layoffs and retrenchment of this scale (Singapore shut, Withdrawal from Germany (SL’s 2nd largest national market), closing down the Brighton, UK office) do all tend to point to a company scrambling to save money. And I think that Gwyn Llewelyn may have hit the nail on the head a little more squarely then the theories of Viewer 2 failures, identifying one factor of the equation everyone has been overlooking:

The SL Business Enterprise “solution” isn’t working.

SL Enterprise, and what is now SL Workspaces were launched a long time ahead of either Viewer 2 or the New User Experience (last October / November). Their roots go back a lot further than that, however, and have been the cause of much angst for many of us. Throughout 2009, Linden Lab was constantly being badgered by the likes of Justin Bovington of LL’s (former?) business partner Rivers Run Red to develop huge swathes of “business only” Mainland. For a time, even the likes of Amanda Linden displayed what amounted to a hostile attitude towards residents.

Everyone seemed to be far too enamoured with the 2006/2007 situation where big business suddenly “discovered” Second Life, with the likes of Nike, IBM, Toyota, NBC, etc., all rushing in to set-up shop here…before just as quickly vanishing again.

Many theories have been cooked up to explain “what went wrong” – both within and outside of LL – with many within LL thinking they’d potentially missed a golden opportunity, albeit one hovering just outside their reach that could be recaptured if they only get things right.

Among all the theories for the 06/07 “boom/bust” business cycle, I don’t think anyone considered the most basic and simple explanation: Second Life just isn’t really very good for real world businesses.

I’ve long been a critic of the “business is all” ethos that did pervade LL for a time. The idea that what amounts to a recreational pursuit could somehow become the nexus of corporate communications and technology development always struck me as simply ludicrous.

Yet it became a major mainstay of LL’s strategic development. But beyond a few “case studies” and the dozen-or-so companies using SLW just what – as Gwyn asks – has it actually achieved?

SLE remains in beta. While there has been some take-up of it (the US Navy, for example, appears to have pulled most of it in-world studies back behind their own firewalls where they use SLE), all news relating to it has dried up. There has been no move to move it out of beta; there have been no really big corporate fish hooked by the “promise” of SLE.

Even Justin Bovington has gone quiet.

So one cannot help but wonder if this might not be the reason behind the current situation. Was someone rash enough to pin LL’s future cashflow and turnover largely on the SLE / SLW tool and environment? Where the rose-tinted business glasses worn to the degree that projections were based around the $55K-a-pop sales of SLE and the ability for LL to pull in even more revenue via business “consulting”, rather than through resident tiers, and the chicken is now home to roost?

So what of the future? Does this all point towards LL going “solely” web?

It really is hard to judge – but I do remain of the opinion that those who are condemning SL’s future are speaking prematurely. While new user numbers have not skyrocketed – they haven’t actually fallen. As a recreational platform, SL remains viable and afloat. It is also going through a series of upgrades that point – if anything – not towards a flat browser experience, but rather towards a more immersive experience: we have Havoc 7 about to be finally rolled out; later in the year full mesh capabilities are arriving. While the latter brings with it a host of other issues, it bodes well overall for SL’s ability to remain competitive and engaging.