CISCO'S VIRTUAL WORK SITE LEADS BUSINESS EVOLUTION WEB OFFERS NEW WAY TO COLLABORATE.

Byline: MARK BOSLET

San Jose Mercury News 

Cisco Systems doesn't believe business ends at the virtual water's edge.

The San Jose company owns four islands in the virtual online world Second Life, each populated with pavilions for product demonstrations, training and meetings.

But its push into virtual work spaces -- where offices and conference rooms exist inside computers instead of concrete -- reaches well beyond Second Life's quirky environment of flying "avatars," or digital people.

The network-equipment maker launched a virtual site for business partners and service providers a month ago where visitors can wander among product exhibits. It also set up virtual workrooms where engineers, represented by avatars, collaborate on new designs, despite being spread around the world.

The company plans to make the virtual workrooms available to all its employees in 2008.

With its interest in virtual environments, Cisco has placed itself on the leading edge of a workplace transformation now creeping into U.S. corporations. The goal is to enhance communications and productivity as work forces go global -- the effect may be a radically different office of tomorrow.

"This technology is just coming of age," said Christian Renaud, chief architect of Cisco's networked virtual environments. "It is at a crossroads.

It's either going to get really big or stay boutique."

Advocates say virtual worlds offer new ways for people to collaborate and foster workplace interaction in an age of dispersed employees. Companies can also save on travel time and cut down on the greenhouse gases fueling global warming.

Virtual worlds might take years to become widely adopted, but interest is growing, said Ian Hughes, a virtual-worlds evangelist at IBM. "Eighteen months ago, they were (considered) insane. Suddenly, they are becoming very real."

Skeptics say serious problems regarding security and the ability of virtual worlds to interact with each other remain unsolved. Workers may also need powerful new computers to run the 3-D environments that make virtual conference rooms seem more like the real thing.

Most corporations have yet to take the first few steps. Even consumer sites such as Second Life that have attracted a lot of press attention see relatively low traffic. According to comScore Media Metrix, a research firm, the Web destination attracted just 340,000 unique visitors from the United States in August, a relatively small number compared with other big-name Internet sites.

Some companies admit they have yet to give virtual worlds much thought.

Others are moving aggressively. One is IBM, which has a variety of experimental projects under way that let employees hold meetings in virtual office buildings with waterfalls and have chats around impromptu campfires.

Participants select from a variety of relatively plain avatars linked to their IBM names -- unlike Second Life, where members can embellish their avatars.

"In virtual worlds, we notice people mingle like they do in real life," Hughes said. "The pre-event mingle gets to be very important."

Sun Microsystems has a project it began in January titled MPK20, a name that refers to the first virtual building. It's an addition to 19 real buildings at Sun's Menlo Park campus. MPK20 has about seven rooms, and its developers are using it for team meetings. Other small groups will be invited starting in November.

In the "team room," workers post documents they are working on and can speak to one another. Nicole Yankelovich, principal investigator, said the benefit is the serendipitous social interaction employees in different locations can share. On any given day, more than 50percent of Sun's personnel work remotely, and employees say they miss person-to-person exchange, Yankelovich said. After virtual meetings, small groups form spontaneously to continue discussions.

"To me, that's what we designed MPK20 for," Yankelovich said. "That is something you cannot do with video conferencing."

Vendors of virtual-world software and services are convinced a large market is inevitable. Forterra Systems of San Mateo began shipping its virtual-worlds software in May and says it has 20 customers, including the Army, which uses a virtual environment to train recruits on checkpoint procedures they will encounter in Iraq. Qwaq of Palo Alto has "scores" of customers for the virtual-world hosting service it has had in the market for less than a year, Chief Executive Greg Nuyens said. Among them is Intel.

"This isn't really a market yet," Erica Driver, a principal analyst at Forrester Research, said of virtual-worlds products for businesses. "It's still experimentation."

And there are good reasons. First, companies need to enhance security so they can confirm the identities of employees and protect communications with encryption in case they are intercepted. Worlds need to be interoperable, so that employees moving from one to another don't need to log out and log in again with new personas.

Computers also might need to be more powerful. During a presentation last month, Intel senior fellow Justin Rattner estimated that a virtual, 3-D environment could require a 100-fold increase in the computational power of servers and place three times the load on personal computer chips.

They are "very computationally intensive on the client as well as the server," Rattner said.

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(1 -- 4) Cisco Systems' push into virtual work spaces reaches well beyond Second Life's quirky environment of flying "avatars," or digital people, such as Don Ainsworth, above left, at home in Ventura, whose Second Life counterpart owns an island villa, or Brenda Beach, below, of Issaquah, Wash., who is Rooby Begonia in Second Life, with a virtual husband and raccoons.

The New York Times