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.
Inara Pey: Living in a Modemworld 
I think they will probably carve up the company into difference consulting services and the actual grid will be whoever hosts sims.
No more liability on their part for stolen content in this set up. The future looks even more daunting for User-Creators unless they are under the umbrella of larger companies.
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The release from content ripping issues is certainly another bonus.
To a small degree, LL have started “packaging” elements of their business for a potential push towards consultancy with the hiving-off of SL Workspaces.
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I think you’re on the right lines, when he talks of more focus and more scaleable support they will be looking at what they do best and what others can do instead.
They are looking to get more for less, that will require others to step up to the plate and take on different responsibilities with LL acting as the glue that sticks it all together.
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“Glue” is an excellent analogy.
Think I’ll, um, “acquire” it :).
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The pawning off of sim resources to outside companies will also hurt user creators in terms of business legitimacy.
The few sims “business oriented mainland” that LL will host will become the official grid. Anyone selling on it (gold status) will be looked upon as more trustworthy.
Will people really travel to estate sims to do their buying?
Or for that matter, visit these satellites for music and art shows? It puts the art continent in another light as well.
I would say being herded off to these new host companies won’t cause so much outrage except from a few. I would say the hosting companies would offer cheaper rates, probably in competition with open sim grids. But for what we take for in cheaper prices we will give up in viability.
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You get no argument from me on all points 🙂
It also puts into context remarks Mark Kingdon made in an interview with Massively: the idea of “streaming” users to specific destinations based on the criteria they select during the sign-up process.
On the viability front: not so sure. There is a lot of antithesis towards OS environments at the moment. Being in private hands, they suffer from a high degree of mistrust. While there is no guarantee that a licensed grid environment supplied by a recognised business would be any more trustworthy, the *perception* is likely to be that it would be – especially should the same reach a critical mass, user-wise.
The break-point, potentially, would be permissions & content protection. *IF* a network of grids established on the *current* SL platform (as opposed to OSG) could offer “interoperability” in terms of cross-grid permissioning, potentially a shared monetary / exchange system (therein lies another means for LL to enjoy a continued income stream through the provisioning of the LindeX to all), then the idea could prove popular among potential licensees, and offer a viable future for users.
Then there is XStreet and the focus on web commerce. What would stop LL from “opening” XStreet to “approved” licensee sites, for a split of commissions on sales? It is not major work for them, and it saves the licensees the pain of creating and maintaining their own micro portals (minimal as that may be in some respects).
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