We say “hello”, they say “goodbye”

Tateru Nino reports some interesting news concerning Linden Lab, with three new hires joining the ranks, namely Judy Wade, Eric Argel and Peter Gray.

Wade comes in as “Vice President of Stategy and Emerging Business,” while Argel is the new “Director of Information Architecture”. Gray joins as a “PR specialist”.

What is most interesting about Wade and Argel is their pedigree: Wade was formerly employed by Mitch Kapor (a serving member of the Linden Lab Board), while Argel worked at Organic…former home of Linden Lab’s CEO Mark Kingdon (“M” Linden).

Quite what their precise roles will be is unclear. However, it would appear that Argel’s role has potential cross-over with that of Frank Ambrose (“FJ” Linden), the Senior VP for Global Technology. Has Frank perhaps been too forthcoming of late with he blogs on the status of the Grid?

Wade’s title is probably more revealing, and again, following on from the acquisition of XStreet SL and OnRez, tends to confirm that the Lab is moving to pitch itself more as a service provider than the “mere” platform provider it has until now insisted it has been.

Question is, service provider to whom? The existing user community? This is kind of hard to accept given the overwhelming attitude of Kingdon and Zdanowski, which frequently suggest we are a necessary evil to be tolerated, rather than embraced, while taking the company on to Bigger Things.

Again, taken in a broader context: the emphasis on “immersive experiences”, tie-in with the likes of Rivers Run Red, Wade’s title and Argel’s background do tend to point to Kingdon et al pinning a good part of the Lab’s future on “corporate solutions”.

Or are they looking to beef-up the company for an IPO or possible technology sell-off, as some have suggested? Of course, talk of IPOs have been around for a while – as have reasons for the company not going in that direction. But times are changing. Kapor et al like to have Things That Do Things – and push-come-to-shove, in the real business world, SL actually does very little in the scheme of things. Perhaps the only thing mitigating against an IPO at the moment is the general state of the global economy, and you can be sure Kapor et al will want their pound of flesh arising from any offering. Which is why a technology sell-off might be more the thing…

But back to staff. As both Tateru and Prokofy Neva note, Kathleen Craig (Katt Linden) has now gone from the Lab, having departed last week. While Linden Lab rarely – if ever – discuss specifics of staff moves, that Katt went without mention, and no apparent move has been made to replace her in the role of “Resident Communications Manager” again tends to confirm the importance (or lack thereof) The Management accorded her position, as I reported on her appointment. It will be interesting to see if we ever hear anything about the position she filled, or whether it’ll be carefully packed into a box and filed in the Lab’s basement….

Peter Gray’s role seems somewhat nebulous based on the reports filed so far, and one awaits the official Linden Lab announcement with interest. However, he comes from Lewis PR, the firm used by Linden Lab for its PR and media communications. This suggests that he is somewhat familiar with Second Life…and also begs the question, whither Catherine Smith (Catherine Linden), the Lab’s Senior Marketing Manager? Is she indeed consigned to the Lab’s car park, as Prokofy Neva suggests?

Shifting the paradigm?

Yesterday, a rumour started that Linden Lab were making moves on XStreet SL (formerly SLexchange) – the successful web-based “out-world” shopping facility created by Apotheus Silverman.

Some dismissed it as nothing more than a disgruntled employee from XStreet stirring the waters. However, Linden Leb themselves have confirmed the situation – and the fact that they are taking over / shutting down OnRez.

This is nothing short of a major paradigm shift in Linden Lab’s business, and now fully explains why the Alphabet Lindens (M (Kingdon), Z(danowski), T (Hale) et al) have been going on about the importance of content. Simply put: content generates continuous commerce far more than land sales, which rise and fall (albeit with bigger profit margins) depending on such vagaries as rl market conditions, user ebb and flow, the level of trust people have in LL and the most recent farago spawned by LL.

Content, on the other hand, is a steady-state exchange, and while Linden Lab makes money through the LindeX each time we purchase our Linden Dollars, they are missing out on a revenue stream represented by XStreet, where the company takes a percentage of every transaction made – and the transaction figures are pretty impressive. Thus, at a stroke, LL get this percentage – and are free to raise it as “market conditions” demand.

But really, this matter cuts deeper than a simple “money grab”.

  • “out world” sales hs been a booming market, particularly on XStreet, which is approachable, well-laid out, and has three important elements: user feedback, its independent forums and – most critically perhaps from LL’s perspective: a search engine that works. Shopping on XStreet is popular because it is easy. Whatever you want is relatively easy to find. The current tool provided by LL is not user friendly. Shopping using it can be a frustrating mix of keyword experiments and pot-luck Tps. Thus, people use XStreet straight from the comfort of their own (SL) homes. And even if they do visit a store in-world, chances are the SURL came from XStreet more readily than LL’s search tool.
  • XStreet provides LL to “showcase” content. Shopping in SL is very granular. It’s about objects. It’s easy to get individual items – lounge furniture, garden furniture, individual chairs, tables, etc. But what about coalescing products into related groups. For eample: want to buy a house right now, and furnish it? You need multiple searches with the LL search tool, and pot-luck on shop visits to assess item quality. Now, with the XStreet tool comes the ability for them to provide a search tool that lets you readily find houses and all associated content (furnishings, beds, kitchens, etc.), all from a single “high-level” search. In many respects, this is no bad thing – so long as LL don’t start showing favouritism as to which content creators get to be flagged for these “high level”, one-stop searches
  • Xstreet is a “trusted” brand. While nascent opensim grids have a way to go before they are in any way “trusted” or “viable” (although some show promise and could well mature into 2010). Hence, a good choice for content creators from elsewhere to use to sell their wares in the future – thus LL have squarely staked out a claim to potential Opensim “emerging markets” and income they may generate. There’s even a case, as Dusan Writer points out, for the Xstreet acquisition to re-open the doors to LL’s “interoperability” with Opensim grids in terms of service provisioning.

All of the above could spell positive notes for all; so what if LL are taking a piece of the action: a new, properly-granular search engine that delivers results based on criteria / keywords can only help improve our search experience. Similarly – and with certain caveats – the “one stop” searches for related items could go a long way to rerducing user frustration. And having a trusted, viable “out-world” sales channel could well help the more viable Opensim grids get their acts together fiscally and “corporately”.

But there are downsides.

For a start, XStreet is perhaps the last large-scale bastion of free (forum) speech on SL. We’ve already seen how LL have coralled freedom of expression on their blog and their own forums. Expect the same in XStreet – assuming the forum survives. Which I doubt.

Also…content sales provisioning is not an awfully big step from control of content for sale. Zdanowski talks about “exciting times” for merchants, and the opportunities for “partnerships” with LL. And herein sounds a note of danger. We’ve already seen one behind-closed-doors partnership deal suddenly pop-up in terms of the USS sailing deal.

One could argue that that situation was somewhat different – true. But the precedent it set applies nevertheless. It demonstrates that LL will align themselves with whoever they feel is of the most use to them, and the heck with anyone else in the same game. Thus the worry here is that in moving into content sales, SL will seek to leverage the larger, more established (and “acceptable”) businesses to further the attraction of XStreet to SL users – at the cost of the smaller merchants and businesses, who are left struggling to gain visiablity against ill-defined “acceptance criteria”.

Prokofy Neva
– in one of her more lucid posts – also raises some valid concerns on the acquisition – and some very interesting points (particularly Zdanowski’s real estate background and LL moving into the “real estate” business). Again, they’ve dabbled in the past with “prefab sims” on a small scale (Mos Ainsley of OpenSpace imfamy and its cousins spring to mind), so one does wonder what is coming next: a move towards prefab sims to compete against private island sims?

“Yes, ladies and gentlemen, LL announces the prefab Homestead! Buy your sim through our online store, and simply choose your preferred house from Column A, lounge furnishings from column B, bedroom furnishings from column C (etc)- and remember! all the merchants listed in this offer are LINDEN APPROVED!”

Sounds fanicful right now…and may remain that way….but the thought is worrying.

Prad Prathivi, writing in Metaversally Speaking puts it most succinctly:

“By acquiring both XStreetSL and OnRez, Linden Lab have essentially wrapped up the monopoly on marketplaces, and have once again showed us who Daddy is. As a company which can already use our content as they please in world (as per the ToS), and now demonstrating that they can acquire such resources as these popular marketplaces, does this mean that the Lab are looking to clamp down on the innovate market, and enforce their control in the name of profit?”

Indeed.

And what of more adult content? We’ve had the age verification farago once….but now even Phil Rosedale is tacitly admitting Teen Grid is a bust and hinting that it may be “merged” with the main grid (his comments that the main grid will be “for all ages” made at the recent Metanomics event). One cannot help wonder whether a darker side of content control is in the offing: who’s to say offerings made to whatever XStreet morphs into under LL’s management will not have to be vetted for “grid suitability”….. and if it fails to pass muster, it doesn’t get to be listed…?

And whither then?

Is that the *clunk* of the other shoe hitting the floor?

John Zdanowski (“Z Linden” – alphabet fetishism rules!), has posted a 2008 Quarter 4 report that makes for some interesting reading.

After waffling on about user hours and logins – figures that have always been highly questionable as a measure of the stablity / growth of SL – Zdanowski drops a corker that is breath-taking in the amount of spin it contains.

He gushes: “Based on Resident feedback and the resulting purchases, conversions and cancellations, we believe the changes we made to the product line incorporated the concerns of the majority of our Residents…”

Pardon?

To exactly what feedback are you referring, John? The 4000+ votes on the JIRA that opposed the changes you were making to Openspace sims? The 3,000+ entries in Jack’s / “M”‘s own forum thread on the subject, the majority of which were against the move?

Or are you chosing to ignore these voices – the voices of those most affected, hurt, or simply downright concerned; going for the age-old falsehood that because people are silent, they must be in agreement?

It’s easy to point at so called “daily log-in figures” of 70K+ and decide that 4,000 voices on the JIRA simply don’t stack up by comparison (it’s less than 10%, after all). But to do so and try to claim that, by extension, the “majority” of your user base is, by implication, “happy” with the switch-over is, well, somewhat disingenuous.

Statements such as this simply provide the unkind with ammunition that Zdanowski’s title should actually be Chief Fanciful Officer, for trying to pretend nothing untoward happened between October and December in terms of a user-base outcry.

If one were bloody-minded, one could also point out the face-slap contained in the statement:

“Only about 300 or 2% of the original Openspaces remained Openspaces, conforming to the limits that the Openspace product was originally intended to support.”[my emphasis].

If OS sims were always supposed to be little more than water and trees, John – then why did Jack et al make such a song and dance over the the prim increase to 3750? Indeed, why increase the primmage at all on the Voids? 1875 is still a LOT of 1-prim sculptie plants and linden (or sculptie) trees, and it is still a lot of underwater “landscaping” in terms of corals, etc. Why also, given it must have been evident that OS simwere being “abused” relatively early-on, did you all spend so much time trumpeting the “growth” in land ownership and use in the months following the release of the Openspace product?

However, while some may still smart over the Openspace sim situation – which has done an extraordinary amount of damage to Linden Lab’s relationship with its active user base, whether Zdanowski, Kingdon et al are willing to admit it or not – the fact remains that it is now history, and thus moot.

What I find more telling in this posting is a line casually thrown in towards the end: “As we continue to refine our land offerings,” Zdanowski says, “we look forward to being able to support a lower priced full region offering along with a premium full region for higher load situations.”

Now, in case you haven’t got it – go back and read it again – specifically the words “a lower priced full region offering along with a premium full region for higher load situations.”

He’s not talking about Homestead sim here. He’s quite clearly talking about a new full sim product, to sit alongside the current full sim offering. Sounds exciting doesn’t it?

Read it again. Note the words, “premium full region for higher load situations“. If that doesn’t set alarms bells ringing – it should.

Speculation has been rife over the last several weeks (couple of months) that 2008 will see a change in tier rates for both private sims and the mainland. In the case of island sims, opionion has been split as to whether tier will be increased or whether it will be dropped (to around $250 USD a month).

At the same time, SL as a whole has run into significant resoucing issues which I touched upon not too long ago. Simply put, we’re all now owning / running so much that we’re gobbling up the essential services contained within the server hardware than is required to support sim operations (memory etc), so much so that on a server running fours sims (1 per CPU), a fair amount of processing time within the server is spent “memory swapping” in order to run all the scripts the four sims use – so much so that overall performance of the sims themselves is being degraded.

So what are we to make of this latest statement when compared to these facts?

It could, as Ciaran Laval suggests. be looked upon in terms of a “glass half empty / a glass half full” statement. On the one had, it could be taken to mean that LL are going to offer up a full sim package that sits between Homesteads and the current full sims in terms of price and capabilities (i.e. a 15K prim sim, but with resources more rigorously throttled than full sims, but not as badly as the Homestead offering looks set to be). On the other hand, it could be so brand-spanking new sim / server set-up that allows massive new usage (increased primmage, perhaps the ability to rez and manipulate default prims bigger than 10x10x10, capability of running more concurrent scripts, for example).

But, however you look at this, the lesson of Openspace is clear, whatever the product offered, any associated pricing will not favour users.

For a start, it is hard to see how such a product can be dropped in between the current “full” sim product and the Homestead product – not unless LL are again playing a little game with us. Why is this? Well for two main reasons (I’ll discuss the game-playing in a moment).

  • If the new product is priced up towards the current “full” sim levels, then it will be stillborn. People really won’t see the point in spending what is “almost” full sim prices and tier for a product that offes significantly less than the existing full sim offering
  • Similarly, if the new product is priced close to the current “full” sim price / tier, and then the latter is raised as a result (thus becoming the “premium” offering Zdanowski mentions), the backlash created will completely dwarf that seen during the Openspace fiasco. Which is not to say Mark Kingdon et al wouldn’t try to shove it in people’s faces….

Of course, there is a third option in pitching the new product between the current “full” sims and Homesteads – and that’s to pitch the price / tier down towards the Homestead end of the scale. But again, this could be risky. Price it too close to Homesteads, and there is a risk it’ll simply kill of Homesteads as a sellable product – after all, why pay $125 USD a month ( as from July 1st), when for (say) $200 a month you can get pretty much everything a full sim offers, and the ability to gain sufficient tenants to recoup a large part of the tier….

Mind you, as I’ve mentioned previously, killing off Homesteads may well be part of LL’s longer-term strategy, as they know full well Homesteads are unlikely to be economically viable after the July 1st tier hike to $125 USD a month (and I seriously doubt we’ll see this new product before that date). If so, then pricing the new product down towards towards Homestead levels could be seen by LL as a means of killing off the lame donkey Homesteads while still maintaining a lucrative income stream.

And if the new product is some kind of “super-sim”?

Well, it’s a no-brainer. With current full sims already hugely over-priced at $1000 USD “purchase” price and $295 USD per month CPU tier (that’s a honking $1180 USD a month per server, an insane price to charge, however one looks at it), then you can bet your bottom dollar any product coming in over it will be equally over-priced. Given we were were all once happy to shell out $1675 USD for full private sims, one can see this figure (or one close to it) hovering in the background, together with a tier price perhaps in the region of $400-$450 a month.

One awaits developments with interest.

Is that the sound of a shoe dropping…?

Jack’s back – and this time he comes (almost) clean…

Remember that back in October, OpenSpace sims were suddenly the cause of much controversy, because in Jack’s words they were being “abused” and were proving to be resource-heavy, and thus adversely affecting overall grid performance?

Well, the good news is, Jack has finally come clean and admitted (as we already knew), that the problem is not restricted to OpenSpace sims (although it could perhaps most keenly be felt on them at times), but is endemic to the entire grid – hence Babbage Linden and others in the Linden camp leading discussions on the manner in which such problems should best be handled, which have been on-going since before Jack created the OpenSpace debacle.

But while it is good that Jack has finally admitted the technical issues are more widespread than he has previously admitted (remember, in his words, this was an OpenSpace issue), and has admitted that LL still have a long way to go before they can address the resource use issue effectively (such as Q2 2009), his comments must be taken as a final, tacit admission that the change in sim status and accompanying tier hike for OS sims had next to nothing to do with these issues, and has always been a clawback manoeuvre.

Furthermore, his posting does little to meet his promise that the technical limits to be applied to Homesteads would be disclosed “well ahead” of January 5th 2009.

Sorry, Jack, a post that says, “we’ll let you know some time in Q1 or Q2 how the resource limits will be applied” isn’t any form of disclosure or discussion, however you try and dress it up.

Indeed, the timeline Jack has revealed in his posting is interesting. Could it be that LL’s strategy is – and always has been – to actually to elminate “Homestead” sims completely over time, while simultaneously milking them as much as possible for tier? Isn’t it rather curious that the new “scripting limits” are due to come into force percisely at the time Homesteads are due for a further $30 USD a month tier hike (to $125 USD a month – something one cannot ever see as being credible or sustainable)?

If we take this latest posting from Jack and put it with the others he has made on the OS situation, then his waffle can really be parred down to three simple paragraphs:

“OK. We have this technical issue affecting the whole grid, and we’ve really, really, drastically undersold the OpenSpace product. Therefore, we’re going to use the former as an excuse to claw back what we see as losses on the latter. However, to dress this up, we’re going to appear to give you a whole new product in the process, although in reality, it’ll be offering you a lot less at significantly more per month. And to cover the fact that we’re using a grid-wide issue as an excuse for doing this, we’ll introduce some basic restrictions on the use of these sim which might help a little with the overall issue.

“BUT, because it’s actually going to take us a lot longer to sort out the underlying issue than it is for us to hit you up with tier hikes, we’re going to take your extra $20 USD a month per sim and give absolutely no guarantees these sims will be sustainable after the end of Q2 2009. Indeed, it’s entirely possible that as of the end of Q2, you’ll find these sims are economically unviable, simply because the new script controls we’ve introduced means users on them can no longer rez their favourite scripted objects, and so are all buggering off to full sims.

“At that point, we’ll give you the option of shelling out an additional $30 USD a month on top of your current tier (which we know is completely ludicrous) – or of getting rid of your Homesteads completely – but thanks in the meantime for the extra $XXX income per Homestead you’ve given us.”

I mean, it is bad enough that LL are essentially asking estate owners to take them on trust for the next 6 months while the resource capping is sorted out and implemented; but do they really believe that come July 1st, 2009, people will actually and happily shell out $125 USD a month for something that in all likelihood they cannot use as an income generator, simply because it is so overwhelmingly limited in capabilities (resource use, avatar limits)?

Which brings me to the second part of Jack’s posting – the tacit admission that there is a much wider issue that is having to be addressed by LL – that of grid-wide resource usage.

To repeat: this is not limited to OS sims, but has been a matter of concern for some time.

Make no mistake, resource usage is a major issue within SL. So much so that the discussions on the subject actually pre-date Jack’s original OS sim announcement. And to be honest, something does need to be done – although whether LL’s preferred solution (essentially treating the underpinning resources available on each server in much the same way as prims are meted out) is the best solution is, I gather, arguable.

BUT…given action is required….why bury the annoucement in an OpenSpace sim “follow-up” posting?

Could it again be because LL are aware that such controls – necessary tho they may be – are going to be perceived negatively, and so are trying to gloss over the “bad news”. If so, they are again doing their users a further disservice. Surely the better way of dealing with this issue is to meet it head-on, with full and clear disclosure to all.

But then, as we know from the Tao of Linden – LL’s management insist that transparency in communications is something that is to be encouraged only between employees – it is not something to be extended to we lowly users.

Which is probably why, in amongst all the confusion surrounding the wider implications of Jack’s statements, one cannot help but hear the gun again being cocked as it is aimed towards another Linden foot…