Palmisano Gets A Second Life

IBM is embracing the virtual world of avatars--and other big companies are close behind

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It's not every day that you hear the captain of a $90 billion multinational gleefully bragging about his alter ego in the online world. But these days, so-called virtual worlds are all the rage, and IBM (IBM ) Chief Executive Samuel S. Palmisano is about to make his mark as the first big-league CEO to appear in a virtual-world setting. "I have my own avatar," boasts Palmisano. He likes the sound of that so much that he says it again: "I have my own avatar."

Actually, Palmisano has two avatars--a casual Sam and a buttoned-down one--who exist in Second Life, the most popular of a handful of newfangled 3-D online virtual worlds. It's the square Sam, complete with Palmisano's signature eyeglasses and dark suit, who will be taking a virtual stage in a virtual version of China's Forbidden City on Nov. 14.

This isn't all fun and games. IBM foresees a sizable business in providing the software, computers, and chips that power 3-D worlds, and in advising clients on how to take advantage of them to market or sell products. At a real-life town hall meeting for 8,000 employees in Beijing's Great Hall of the People, Palmisano will announce just before his virtual escapade that IBM is setting up a new organization to pursue the business. It's one of a handful of initiatives he'll lay out that emerged from an online "innovation jam" the company held for worldwide employees and business partners in September. All told, Big Blue plans to spend $100 million on these projects.


IBM's foray is the latest sign that the virtual world phenomenon is going mainstream. Until recently, Linden Lab's Second Life had mostly been a playground for individuals who enjoy exploring, communing with like minds, and setting up virtual mom-and-pop businesses.

In the last few months, though, all sorts of established companies have been planting their flags. They're marketing goods, trying to sprinkle coolness on their brands, and testing new kinds of online meetings. About 40 corporations have established themselves on Second Life, which has gone from zero members to 1.2 million in just three years. Among them are Sony BMG Music Entertainment, Reebok, Starwood Hotels & Resorts (HOT ), and Reuters (RTRSY ), which assigned a reporter full-time to hang out and chronicle the goings-on.

IBM stumbled into virtual reality thanks to the curiosity of British IBM software strategist Ian Hughes (avatar: ePredator Potato), who is a longtime PC gamer. Hughes started raving about virtual worlds on his internal IBM blog and, before long, IBM scientists and programmers worldwide were buying virtual islands in Second Life and using them for group collaboration or solving computer science problems.

Hughes on Nov. 7 led a guided online tour of Second Life that showed just how diverse virtual reality can be. Stops included a replica of the Wimbledon tennis club, where Hughes runs 3-D replays of actual championship games, an IBM meeting center, a Reebok store, and (whoops!) a casino complete with virtual naked female avatars. "Being the Internet, you never know what you'll find!" quips Hughes.

The most impressive locale on the tour was the scale replica of The Forbidden City being created by IBM designers, which will be the scene of Palmisano's virtual debut. The setting was unfinished, but designers had rendered a platform, chairs, and podium. The visitors' avatars wandered around and tried out the chairs, until they were unceremoniously kicked offline. The reason: IBM needed to rehearse the Palmisano appearance. Apparently, in virtual reality it's tricky for those avatars to get their applause just right.

By Steve Hamm

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