Toward a Virtual Workplace White Paper March 2010
Current and Emerging Needs
A constant and overarching business need is to increase efficiency and productivity in the workplace. This need has historically led to increasing use of automation and technology. And since IBM mainframe computers arrived in growing numbers in business in the 1950s and 1960s and the IBM PC arrived in the workplace in the mid-1970s, the workplace has gradually become dominated by growing numbers of digital tools and technologies. With the arrival of the Internet, the digitization of work has accelerated, as has the world of digitized leisure and entertainment. As the numerous new devices, tools, and technologies at the 2010 Consumer Electronic Show in Las Vegas, Nevada, in early January 2010 have demonstrated, the pace of digitization continues. And technical progress is contributing to what will become an increasingly virtual workplace—in which electronic devices and networks will become the place where we work, not just the tools that we use to do our work.
The trend toward a virtual workplace is also driven by growing numbers of workers' spending more time in the field, interacting with customers, business partners, and collaborators and spending less time in traditional offices. But today, a netbook (or one of a growing number of other digital devices) and Internet connection will give these workers access to documents and other resources and to their colleagues—either synchronously or asynchronously. In some companies today, fewer than half of the employees come regularly to the companies' office facilities. And when they do, most of them use temporary cubicles that provide a small space where they can access their virtual workspace. Growing numbers of firms in high-tech or other industries are moving in the same direction as their employees become part of highly distributed, virtual teams, with members anywhere in the world, needing to meet and collaborate irrespective of place and time.
Virtual workplaces also enable temporary or part-time workers meet other project-team members and to come up to speed quickly and easily by accessing, perhaps from their home offices, virtual project rooms where they can find all the project documents (that could include videos and visual timelines of the project up to now) as well as information about the projectteam members. As organizations seek new ways to reduce costs—including costs of office space and physical facilities—and increase productivity and efficiency and at the same time perhaps improve their "green credentials" (by reducing unnecessary travel because teams can meet virtually), the drivers behind the move toward the virtual workplace will continue to push organizations to make the virtual workplace more effective.
Because the evolution toward a more digital and virtual workplace has been going on for many decades, it should come as no surprise that thousands of tools, software applications, and lots of technologies enable virtual workplaces. In the past couple of years, in particular, socialnetworking technologies have been the latest manifestation of emerging digital tools finding use in the workplace. This paper only scratches the surface of the available technologies and points to emerging trends. But subsequent sections of the paper, including the case study of Cisco, point to a variety of tools and technologies that either play a significant part of the virtual workplace today or will do so in the near future.
Today, no holistic or comprehensive technology solution provides everything one might need in one's ideal virtual workplace. Such solutions might soon emerge, or organizations may at least be able to create such comprehensive solutions relatively easily and cost-effectively. They could do so via new forms of "mashups" or as different point solutions can easily integrate because of increasing availability of open application programming interfaces. Recently a virtual-worlds (see below) platform developer noted that he is now thinking about how he can help clients create new mashups by integrating various Google tools and technologies, including Google Wave, or certain pieces of open-source virtual-worlds platforms, with their own platform. Doing so will give organizations and users greater flexibility to customize their virtual workplace.
Figure 1 shows some of the available tools and technologies that can help to create effective virtual workplaces. The growing interest in and use of "mobile everything" and the proliferation of devices, form factors, new user interfaces, and exploding software applications that these mobile devices can provide will be some of the dominant themes of the virtual workplace for years to come.
The figure does not do justice to a couple of other areas that will also shape the emerging virtual workplace:
- Collaboration tools. This broad category has grown significantly through the years, and today hundreds or perhaps thousands of application providers offer point solutions or solution suites that promise to make distributed collaborative work easier and more effective. IBM's Lotus division is one player that has long offered a variety of tools for creating and sharing documents and enabling various forms of communication among collaborators. Microsoft's SharePoint solution also offers a wide range of document storage, communications and collaboration tools. Many analyst and consulting companies, like Strategic Business Insights and Collaborative Strategies (San Francisco, California), monitor and evaluate many of the most interesting collaboration tools in the marketplace and help organizations find what they need.
- Knowledge management. The Strategic Business Insights Explorer service monitors knowledge-management tools, and knowledge-management practitioners have long tried to help organizations capture and enable effective and efficient sharing of knowledge. Much of the most valuable employee knowledge tends to be tacit knowledge—not explicit and thus easily available in digitized form. This situation has complicated the lives of knowledge-management practitioners. But interesting solutions are now available from companies such as Altus (www.altuscorp.com ), which records presentations (making video as well as providing transcriptions and associated PowerPoint and other documents) and enables quick and easy search to take the user quickly and efficiently to perhaps one specific slide among thousands of slides (so the user can access the information and see the video and read the transcript if necessary). Cisco has recently added an Altus-like functionality in some of its collaboration tools, to enable workers to find and access digital documents quickly.
As access to the Internet increases and broadband (at increasingly higher bandwidth and at lower cost) becomes more available, we will also see growing use of so-called rich media—media that include audio and video. Cisco is one of the big proponents and providers for the use of video (and its core business, sophisticated Internet routers and switches, would of course also benefit in a big way if rich media gain widespread acceptance and use). The section below shows the company's vision for collaborative technology and how this technology will contribute to "next generation virtual workplace."
Cisco Case Study
Collaboration Technology and Strategy
At the company's Collaboration Summit in San Francisco on 9 to 12 November 2009, John Chambers and other executives presented Cisco's "Open, Interoperable and Flexible Collaboration Architecture," a comprehensive blueprint and strategic direction for how the company will be able to achieve its very ambitious growth targets (and thus silence skeptics and critics who think that Cisco has become overly ambitious and is unlikely to meet its goals—see "Cisco's Extreme Ambitions," Business Week, 30 November 2009). Chambers emphasized that the Collaboration Summit was not for product announcements, but in fact Cisco did announce 61 new products, including 10 that Chambers believed were "transformational" in terms of enabling Cisco and its customers to change significantly how they do business—and most of which will help support a virtual workplace.
Collectively, the new lineup of tools, technologies, products, and services—some of which Figure 2 shows—are likely to enable Cisco as well as its customers to "put collaboration into a higher gear" and help create high-performance organizations by making collaboration easier and more effective and extending it up and down the value and supply chains. In the process, Chambers expects that Cisco's new vision, strategy, and execution will help it achieve the following goals:
- Grow through effective acquisitions. Cisco is already known for its aggressive and efficient acquisition policy, and Chambers noted that in just the past 30 days before the summit the company had completed four major acquisitions, including one that gave Cisco control of a leading videoconferencing player, Tandberg.
- Extended market reach. Chambers is targeting over 30 new markets—"market adjacencies" as he referred to them—as key components in achieving Cisco's target growth rate.
- A 12% to 17% average annual revenue growth rate. If Cisco meets the goals in the previous two bullets, it may achieve its revenue growth, but margins and profits may suffer as the company moves into lower-margin server markets, for instance.
- Improved employee productivity by 10% per year. Chambers and other executives gave product demos to illustrate how Cisco employees can collaborate much more effectively in their new virtual workplace, leveraging the many collaboration tools and technologies the company is now introducing. (On the basis of research by companies participating in a consortium that focused on collaboration, Cisco in 2009 developed a collaboration framework. See Creating a Collaborative Enterprise: A Guide to Accelerating Business Value with a Collaboration Framework.)
- Transformation of Cisco's management structure and decision making. Chambers believes that its radical governance restructuring and decentralization—resulting in 9 Councils that focus on new business opportunities that exceed $10 billion, 50 Boards that deal with business opportunities exceeding $1 billion, and large numbers of Working Groups—will enable more and better collaboration at the executive level of the company. The company has also restructured its engineering and sales forces.
Cisco is perhaps unique in that it has a wide range of its own tools and technologies—built by Cisco or acquired (including WebEx, Tandberg, or Flip)—that it can use, and when they demonstrate their value internally, they also build reference cases that no doubt will be used by its own sales force when it goes out and sells the products in Figure 2. But many other companies are also offering tools and technologies that will enable the next-generation virtual workplace, even if other companies may not be able to offer as complete a product lineup as Cisco's—at least right now. Hewlett-Packard (HP) is one player with a wide range of products that will enable the emerging virtual workplace. The company has Halo, similar to Cisco's TelePresence, but HP is not so far positioning Halo in the same central marketing position as Cisco is doing with TelePresence. Collaboration is also not currently an overarching strategy theme at HP in the way it is at Cisco.
Virtual Meetings and Events
Cisco used to bring thousands of salespeople together every year to celebrate their success in the past year, learn about new products, meet Cisco executives, and socialize with their colleagues. Because some of these events took place in Las Vegas, Nevada, an opportunity also existed for people to enjoy some great shows and spend time in the bar with colleagues and friends. The planned sales event for the fall of 2009—Global Sales Experience (GSX)had an estimated price tag of $80 million to $85 million, including air travel, hotel accommodation, and all the other expenses associated with putting on a three-day event. With an estimated cash hoard of about $30 billion in early 2009, Cisco could easily afford this type of expense, but the Cisco CEO and chairman of the Board, John Chambers, decided that doing so would not be right. Not only would it send the wrong message at a time of recession, but also the company wanted to send another important message: Virtual meetings and events will become a common business practice for Cisco employees. But, perhaps even more important, Chambers wanted his sales force to recognize and understand that virtual meetings and events will become more common for Cisco's customers and potential customers, and Cisco should set an example of how to do them. Cisco also hopes to provide customers with the technology and services to enable them to put on virtual meetings similar to Cisco's GSX effectively and efficiently.
According to Kenny Lauer, director of Digital Experience at George P. Johnson (GPJ), a leading experience-marketing firm that designed and managed GSX, the virtual event was very successful on the basis of number of attendees, level of engagement, cost savings and other key success factors that the company used for the event (see Table 1). GSX was in many ways an experiment, and many future Cisco meetings and events will likely be "mixed-reality events"—a blending of traditional physical and virtual events—rather than completely virtual events. Even so, GSX demonstrated many elements of virtual business meetings that we will see more of, including use of mini games to keep the attention of virtual attendees.
GSX Characteristics and Statistics
Source: George P. Johnson
Telepresence and Videoconferencing
High cost, at least for now, can be an issue for some companies interested in Cisco's TelePresence product (especially the large-room versions) or in HP's Halo, which is also relatively expensive. But some virtual-world environments can end up costing as much—or more—depending on how elaborate a facility an organization decides it needs and what kinds of applications users are interested in. Some large companies have spent well over a million dollars on their virtual-world facilities, and in an April 2009 study by Erica Driver of ThinkBalm (one of the leading virtual-worlds analysts), 5 companies (of the 66 organizations she studied) reported that they had spent over $1 million on their virtual worlds at the time of her study.
A growing number of vendors of more moderately priced videoconferencing systems are also providing users greater choice of tools and technologies for videoconferencing, and Logitech recently entered the industry through the acquisition of LifeSize. A start-up, ViVu Inc. also recently began offering an online service that expands the reach of videoconferencing, allowing large numbers of people in multiple locations to interact.
Another interesting development illustrating new and emerging business opportunities related to the virtual workplace is the August 2009 announcement by American Express Business Travel that it will offer a Virtual Meetings eXpert. According to American Express, the Virtual Meetings eXpert is a unique telepresence solution that will act as a central hub and aggregator of both public telepresence facilities and the private network a company may already have in place. The combination of public-private access offers a company access to a broader pool of virtual-meeting options. Virtual Meetings eXpert will help clients achieve their individual travel goals and savings through a flexible platform available both online and offline.
Another set of technologies enabling more virtual workplaces falls in the category of virtual meetings and events and includes the company InXpo, which provided the virtual-event technology used by Cisco in its GSX event. Figure 1, which shows some categories of tools and technologies that enable the emerging virtual workplace, identifies some companies that InXpo faces in the virtual-meeting and -events marketplace. We are likely to see new companies enter this market segment as the market for virtual meetings and events keeps growing, driven by a number of factors on both the demand and the supply side of the growth equation. On the demand side, companies are looking to reduce travel cost and carbon footprint, improve productivity by eliminating/reducing unnecessary travel and meetings, and facilitate better collaboration in distributed teams. On the supply side, drivers include more seamless integration of tools and technologies enabling better user experience and new features and functionalities improving work effectiveness and efficiency in virtual meetings.
Cisco's wide range of products enabling new and improved ways of working virtually is impressive. But other companies—including Oracle, HP, and IBM—also offer a range of interesting tools and technologies that will support the next-generation virtual workplace.
Although IBM does not, at least yet, have anything similar to TelePresence, IBM has long been a leader in both research and deployment of collaborative work technologies (including its Lotus product line) as well as 3-D immersive environments or virtual worlds. In the last area it is far ahead of Cisco (although Cisco is currently active in a beta test of Second Life Enterprise; see below). IBM has over 6000 people who regularly use virtual worlds—especially Second Life and OpenSim. According to Neil Katz, a distinguished engineer who is one of the leaders of IBM's work on 3-D immersive environments, IBM has on average of one meeting in virtual worlds every day. The company has assigned three people to contribute to the OpenSim project and has its own virtual-world platform, SameTime3D (which integrates its Lotus Sametime product with the OpenSim platform).
Table 2 lists some major applications that we will likely see as part of the virtual workplace built with virtual-world platforms. Virtual collaborative work will become easier as new virtualworld platforms emerge and gain adoption.
Emerging Applications of Virtual Worlds
|Applications||Industries and Companies|
Source: Strategic Business Insights
|Collaborative work||All industries with distributed project work (IBM, Intel, Unilever)|
|Learning and Training||All industries, universities, and schools (Silicon Image, BP, AstraZeneca, E&Y, DoD, BAE)|
|Prototyping and experimentation||Architecture and construction (Starwood Hotels, Philips, Crescendo Design|
|3-D modeling and data visualization||Data centers (computer industry and other high-tech industries) and control centers (Chevron, StatoilHydro, NOAA, FXPAL)|
|Trust building and socialization||All industries using virtual, distributed teams (Sun, Cisco, J&J)|
|Focus Groups with Innovators||Music and entertainment (Sony BMG Music Entertainment, Viacom, Electrolux)|
|Branding and promotion||Consumer-product companies (P&G, Pepsi, Dell, CIGNA)|
|Talent discovery and recruiting||Consulting industry and hiring agencies (TMP Worldwide Advertising & Communications, Manpower, Kelly Services|
Second Life—the poster child for virtual worlds and subject to a great deal of hype during 2007; found itself in the "trough of disillusionment" (according to Gartner's Hype Cycle) in much of 2008—is the most well-known virtual world. It mostly focused on serving consumers until building up an enterprise-focused team in 2009. The company announced in November 2009 that it would launch an enterprise-focused version of Second Life in the early part of 2010 that companies can install behind their own firewalls and thus gain a secure, virtual workplace. But Linden Lab's Second Life platform is only one of a growing number of similar platforms, with either proprietary technology or open-source tools and technologies, as Figure 3 shows. Some of the leading contenders with either proprietary technology platforms or open-source platforms for enterprise virtual worlds include the following:
- ProtonMedia. This company beefed up its enterprise credentials in 2009, by offering a number of features and functions—including strong integration with Microsoft's Sharepoint (one of the major collaboration platforms in use by large companies, in particular)—that will appeal to companies interested in using virtual worlds platforms for work.
- Teleplace (formerly Qwaq). This platform is relatively easy to use. It enables the user to drag and drop applications (including Excel spreadsheets) into 3-D meeting rooms so that meeting participants can work in real time on the same application.
- Wonderland. This open-source platform from Sun Microsystems is undergoing tests by both enterprise and academic organizations, but the future of the platform is uncertain because of Oracle's acquisition of Sun. Oracle has decided not to continue the development of Wonderland. The Wonderland team—headed by Nicole Yankelovich—will now develop the platform with support from the open-source community.
- OpenSim. OpenSim is another open-source contender that has been gaining interest and popularity, as a potentially cheaper and more flexible option because users can customize it to meet their unique needs without paying costly fees to a platform developer. IBM has been working extensively with this platform.
- Sirikata. Sirikata is a newcomer that is still in pre beta but is interesting because the developer team comes out of the computer science department at Stanford University, and the platform is also highly Web oriented. The Stanford team wants to use Web tools and standards as much as possible and wants to build a core set of capabilities upon which others can build the applications they want and need.
Virtual Worlds are still an emerging and small industry, with mostly relatively small players. IBM is also an active player but does not really have its own platform, although it does offer Lotus Sametime 3D, which represents Lotus Sametime integration with OpenSim. Although virtual worlds offer many interesting capabilities, and millions of users today play games or are engaged in more serious uses of virtual worlds, virtual worlds still suffer some handicaps that will hold the industry back:
- Steep learning curve. Most users of virtual worlds must invest some time in becoming comfortable with navigating and using 3-D environments. This comfort may require avatar customization, although some organizations using ProtonMedia and Teleplace offer users a choice of premade avatars. These environments are also somewhat easier to use than Second Life, for instance.
- Access challenges. Most virtual worlds require users to download and install relatively heavy clients. Users must also meet certain computer-hardware specifications and have broadband access in order to have a good 3-D experience.
- Enterprise systems and tools integration. Although many virtual-worlds platforms have taken steps to make integration with Microsoft Sharepoint or other enterprise tools and technologies easier, many common desktop productivity tools are still not easily available for many users of virtual worlds (one of the problems that Sirikata hopes to solve).
Clearly, virtual worlds represent only one of a growing number of tools and technologies that enterprises can use as they prepare for the virtual workplace. At some point we will likely see office workers having virtual-worlds environments open all the time on one computer display so they can quickly meet and collaborate with coworkers whom they see entering a project room, for instance. Videoconferencing and especially high-end, high-definition video (including highdefinition stereo audio) of Cisco's TelePresence and HP's Halo systems also offer increasingly popular tools for virtual work. Although these video systems may not offer the flexibility and the same degree of immersiveness that one can achieve by being in a 3-D space with one's avatar and thus being in the same space as one's coworkers or collaborators, TelePresence, Halo and similar products also offer a very high degree of presence with remote participants as well as immersiveness. These types of products also offer other advantages vis-à-vis virtual worlds:
- High executive comfort. Few executives use virtual worlds, because they typically are unwilling to invest the time in learning how to use the 3-D environment. Many also don't appreciate the value an avatar brings. But executives are often the targeted users of TelePresence facilities, but use is spreading downward into the organization.
- No learning curve. Executives can walk into a TelePresence room, turn it on, and begin the meeting. The high-definition video and audio also provide the kind of fidelity that appeals to executives, and they can almost sense the other meeting participants are in the same room, even though they may be anywhere in the world.
Perspectives and a Look Ahead
As the speed and range of innovation continue to accelerate and globalize—an element that makes it even more interesting and uncertain as we look ahead for what may come next (because more out-of-the-box innovations could come from China and India, for instance)—we no doubt will see a variety of tools and technologies that will give us new capabilities and functionality in the virtual workplace.
Another likely development is greater, and more seamless, integration of what is currently a mostly highly fragmented set of point solutions addressing some but not most or all of employees' needs to use the virtual workplace. Having an always-on virtual-worlds environment on one display on one's desktop or accessible on one's portable device—and thus enabling realtime connection and collaboration with anyone who is currently in the VW environment—could help accelerate collaboration and make it more integral to one's regular work processes. Such a scenario will also make workers more comfortable with and used to operating in 3-D immersive environments. It thus will likely increase participation in virtual meetings and events.
Although some types of meetings and events may well be replaced fully by virtual tools and technologies, in most cases virtual and physical meetings and events will complement each other as mixed-reality events. The key to success with the use of new virtual tools and technologies will be in finding the right mix that meets both business needs and objectives and those of the end users. Although Cisco believed that the virtual CSX of 2009 was successful, many of its salespeople missed the excitement and buzz of a live event in Las Vegas, which is very hard—or perhaps impossible—for any virtual event to replicate. So, although Cisco has strong reasons for showcasing technologies that make great virtual experiences possible, the company will likely continue to experiment with various "blends" and the use of various activities and tools to see what works best for what users and for what types of meetings and events. But even though companies will embrace the emerging virtual workplace with different degrees of speed and enthusiasm, the direction of change is unmistakable: The virtual workplace is taking shape and organizations and workers must prepare and become smart in deciding how they can best take advantage of the opportunities that will come.