How could SL go open source and be profitable?

And Microsoft has a reputation for writing good software ... among those people who don't know better.

The "anti-business" thing stems simply from not having grasped the open source business model and benefits, and hence continuing to operate a cathedral setup.

Well, yes, the reason we were frequently cautioned as to our position on OS software was precisely because it was perceived as a threat to the crown. It was interesting to see attitudes regarding Linux amongst the execs go from amused dismissal to strategic attack. I myself am an OSS convert to an extent...although I do believe that a lot of people have gone overboard with the notion that ONLY open source can provide any value to the technology community and any managed effort at all is not only technically but philosophically flawed (SL after all is a managed effort). Blind in the left eye or the right, you're still half blind.

I saw one of the Lindens say something like SL had unexepected limitations and other issues that needed to be solved before they would seriously consider publishing code (or something like that). Very curious what those are, aside from the ones we can take educated guesses at. I'd also be curious what the perceived strengths are. I have a feeling the former has to do more with their vision for SL as a development platform, the latter having to do with avatars and the social aspects.

Everyone seems to be debating the technical merits of an open source approach, and nobody seems to be addressing the business issues.

If you think about it, the IP (Intellectual Property, not Internet Protocol) that LL has developed is proprietary to the SL grid, and anyone who wants to avail themselves of this technology must pay a licensing fee to LL. This ranges from a $10.95 one-time charge all the way up to $100's a month. With the monthly fees, you are paying for use of the technology, as well as the hosting services provided by LL.

Because LL has chosen to keep the lid closed on this technology, they have a captive audience, and are trying to build a business around it.

Now let's assume that LL decides to GPL the source code (either server or client). They are going to have the rug pulled out on a lot of potential revenue. Those who examine the client code might try to create a "clean room" implementation of the server side. Those who take the server code may create a competing grid.

What's the advantage to LL? How do they come out ahead here?

I'm not arguing against Open Source in general. As one who has been hacking around with Linux for a decade now, I am well aware of what a dedicated community of skilled software engineers can accomplish. But to second guess the approach chosen by Linden Labs is a slap in the face to their acumen as business people.

- Ace

It's a matter of balance. LL is a business here and now, yes indeed, but they also want to be a business in the mid term future once effective open source metaverse products have appeared.

A good CEO doesn't just look after today's income, but plans ahead. And when a company and a product niche are as small as LL and SL are today, while the future clearly suggests a multi-mega billion dollar industry in the making, then no CEO who isn't totally myopic is going to let current customers' dollar-focus hold his company back.

And Philip is not your average beancounting CEO ....

Actually Ace, that topic was picked up in a parallel thread...quite a few of us said the same thing (captive audience etc.). I think the idea was to keep the topics apart.

If LL Goes open source (which they have said is inevitable) then they are going to be a hosting company. If they are going to be a hosting company then they need to do a few things:
1. Gain a solid customer base.
2. Show that their product is usuable / viable / long lived, and that there is a need for that product and / or service.
3. Show that people are willing to pay for it.

Now, for people to invest in LL they have to show the above three things. These are the moves by LL which show that

1. Open a teen grid to increase the customer base (by allowing people under 18 as well).
2. Show steady growth. (SL is growing, I don't think anyone would argue that)
3. Show that people are willing to pay to have their sims hosted (Private Islands, Monthly Tier).

Where they are sort of failing, is the system usability. Lag has gotten worse, the asset server problems are worse, people losing inventory, people's builds being returned for no reason, etc... It's why I haven't logged on in 3 months. BUT, the investor's really don't know that, because LL's numbers still look good and they appear to be making forward progress (More people coming in than going out). Additionally, the lifetime 9.95 account makes it difficult to track exactly who has "left" SL.

Right now they don't really have any competition. Yes, you can argue WoW, EQ, Etc... but those are not Dynamic Worlds, they are static. So, I would venture a guess and say they are trying to:

1. Increase their customer base.
2. Get more recognition out there.
2. Work on bugs, asset server problems

Until such time as a competition arises. When they feel threatened, they will go open source in probably a manner like lordfly suggested and because they have the large customer base, and will have had their name out there longer, they will have the edge. Until we see competition within SL's genre, we probably won't see open source.

This is all of course, highly speculative

Jess

If LL were driven by the need to maximize short-term profit alone, then you would probably be right.

You must admit however that Philip and others in the team have stated in unequivocal terms on numerous occasions that they are instead driven by a vision of truly awe-inspiring potential in open, 3D, cooperative and community-focussed virtual worlds, that "metaverse" that everyone talks about and nothing less.

They've said it so powerfully so many times that it has inspired everyone except the most terminally cynical. And not once have they said that protecting current revenue is their goal --- which is pretty amazing, when you consider that most CEO-speak tends to be about little else.

So, where are we? I don't know, frankly. One thing is certain though: if LL doesn't do SOMETHING concrete to show that it means what it said then people are going to start drifting away on the basis of no proof of the pudding. I'd hate to see cynicism set up a permanent base camp in SL.

I'd have to say that there might be some rose colored glasses taking hold there. SL enfatuation can do that.

I would be willing to bet a nice chunk of change that Philip does not walk into his VC meetings and tell people that he doesn't give a rats ass about their return on investment because the realization of some form of metaverse is paramount above all else.

I would also be very curious how many of those investors are actually long term residents, though one may have nothing to do with the other.

There's a lot of control that goes on regarding what people in SL hear about what is actually going on with LL. The real long term vision of LL is what this relates to, and none of us really know what that is at all.

Like I said in another thread, development services are no doubt on their agenda. Unbeliever?

Linden Lab, creator of Second Life, builds version of 3D world for San Jose Tech Museum 1.25.05
Second Life 3D Digital World Opens at Tech Museum

I'm willing to be they didn't do it for free, or at least without a strategic vision in mind for ultimately making money. I said it before and I'll say it again, LL uses SL as a farm league to develop and hire these sorts of developers. And I'm sure the services don't come cheap.

Not being cynical, just thinking like an investor and somebody that has watched web development evolve for a long time...and LL has investors and people that have watched web development for a long time.

To us that is what they say, and I must admit, that may be definately a factor in their decision making.

However, you do not get 8 million in funding talking about a metaverse that will be really cool unless:

1. You can show that it will be profitable.
2. You can show that what you have currently done has sustained growth.
3. You can convince your investors of the potential for profit.

At some point, money, profit, overhead, membership, sustainability, etc all come in to play. Fortunately the investor(s) probably have played on a subgrid where there is no lag and no severe asset server problems, and have not heard about peoples inventories and builds vanishing due to information loss / asset server problems.

Jess

oh, if you're in Benchmark you're clever enough to visit the forums.

No, I simply dont see any competing technologies emerging. Therefore it doesnt make sense to OS the project until there are. As someone who has personally released several software packages under the GPL, I am pretty sure I am familiar with the community And as someone who holds stake in proprietary code, I can see the benefit in that as well From a business perspective, Open Sourcing something is all about timing. My experience in the biz says that now is not the time for LL to do so. Which would explain why the Lindens say stuff like "someday" when addressing it "Someday" is not the foreseeable future. It is a vauge reference to an arbitrary time.



To compete with Microsoft, mainly. It might be too late for Sun, though. Their timing was off Of course Sun's OS model isnt exactly what one thinks of when thinking Open Source which is why it is pretty heavily criticized in many circles.


Yes, you are correct. They certainally can be. However what advantage would LL have by giving their source code to up and comers who may or may not contribute code back? Not much, I wager! They already have in house development and I imagine their ROI for it is decent.


I love that figure. However 10 million people dont work on the same project. Then we get into code forking et al and petty arguments such as between the Debian team and Red Hat and KDE and GNOME. I dont see the ROI there. Not yet.


Try managing an OS project with the same level of efficiency one gets from in house work with a budget. Its pretty much a pain in the ass. It is difficult to set deadlines, disagreements can turn into code forking ... it can get nasty.


It *will* make financial sense. I dont think it does now though. Then again, I could be wrong. Not everything I have done has been profitable, so I am fallible

Nevertheless, I dont see it happeneing in he forseeable future. A couple years down the road when one of the (mostly neglected!) SL type OS projects gains momentum ... maybe. Not now.

Just my opinion, as always.

The unimaginitive and uninformed Zetan who knows nothing about the world of business and software ...
Antagonistic Protagonist

So (creating a straw man deliberately here, I know that you didn't say this), you reckon that Philip is deliberately pulling the wool over our eyes, keeping us happy with visions of the future while doing *nothing* (yes, totally literally nothing) to help that come about, and interested only in getting his current product into a fit state for marketting bespoke development services?

I assume that you didn't quite mean that, as it's harsh. But if it's not so, then where is the proof of the pudding in respect of something concrete from LL that goes beyond the little niche SL world? Apart from talk.

Well, since you seem to know that's not what I meant, I posted an example of external-to-SL activity by LL...I'm not sure at all what you are asking. LL is beginning to more aggressively engage in development projects external to SL. SL has also pulled many, many employees from their resident ranks, and that's a fact too, not just talk.

Not sure where you're comin' from on that one Morg. You appear to be asking me to restate my post.

I'd also have to agree with Antagonistic up there pretty much whole hog. What he states, and what I have gotten from people with similar software backgrounds now that our little dev team is considering an open source release (which isn't the easiest thing to do), i.e., the makers of OpenAMF, Spring, and so forth, jibe perfectly.

People have latched onto this holy notion of OS and how it is the best and only way to go for technologies, and anybody who doesn't think so, or do so, NOW, is brain damaged. Another extremely frustrating notion is that MSFT made it only through marketing, which is completely untrue....Microsoft's marketing, aside from their overall brand appearance (the boxes look nice) is laughably pathetic (remember the ad with the baloon in the server room). It is simply not true, one could easily say that anybody totally pro FOSS has just been sold on the alternative propoganda. LEGIONS of developers have flocked to MS for years, and you're not going to tell me that the only reasons for that have to do with marketing, unless you have an extremely low opinion of millions of developer for the past two+ decades. I've heard it all and almost nobody can back these quasi-religious beliefs with any consistency. Sooner or later the term "evil" crops up, the crosses and garlic come out, and that's the end of the debate.

There are a variety of issues that exist with open source projects and development that simply don't exist in a proprietary managed effort, such as the project and timeline management issues listed by Antagonistic and other project divergence hassles. 10 mil developers may seem like a boon, but it can also be a terrible mess.

There is proven merit to both approaches, dismissing either one would be silly.

Antagonistic, your points would certainly have been entirely correct a few years ago, each of them makes sense when taken separately and viewed from the old position of proprietary code as resource. However, that's the old rather narrow worldview on which traditional development was based --- you can't ride on the shoulders of giants for very long if you hold that view, instead you fall off and the army of giants rushes way beyond you.

This isn't just a metaphor, it's the mathematics of cumulative development. There isn't a development team in the world that can compete with it, not even in Redmond. It's the mathematics that has them worried, not any small bunch of uncoordinated hackers.

The traditional beancounter's logic was held up high on a pedestal for decades while open source slowly caught up. Now that FOSS *has* caught up in many important areas (but not all by any means) and surpassed proprietary development in a few key ones, the beancounter's beans are no longer telling the whole story, because FOSS is very largely about unquantifiable intangibles.

You can't assign a figure to the number of people who will assist on a project, nor to the amount of work that will be done in any given time period. Hell, you can't even assign a direction in which most of the work will go! However, what you can assign a figure to is the amount of money that you will pay FOSS developers outside of your organization, and that's a figure that even a beancounter should understand as being remarkably healthy for company profits.

That said, I don't think that cost of developent is really the key issue, or Redmond wouldn't have a care in the world. What is key is that the rate of development in FOSS can *vastly* exceed the productivity of any in-house team. One just has to look at the excruciatingly slow dribble of new, heavily bugged code emerging from LL to see that all is not well there. I would certainly project that the gains to LL from open sourcing the whole thing would be vast, simply on the basis of rate of progress, because at the current rate of progress LL will be out of the picture in 2 years.

So, I'm ambivalent about LL's position on this. I believe that they know that the only way of fostering a dramatic increase in the rate of evolution of SL is to open-source it, because Philip is not dumb and he's had his fingers on the pulse of FOSS so he isn't predisposed against it like some other CEOs.

On the other hand though, all the evidence available is for the prosecution, none for the defence --- there has been ZERO actual movement towards an open metaverse from LL, and now we have additional circumstantial material for the prosecution in the guise of a halt (alleged) to the work on a native Linux client.

It doesn't look good.

But I don't like rumours. Philip should simply say what his priorities and near-term plans are, to avoid accusations of keeping the metaverse visionaries happy without any actual intent to help.

Cost of dev isn't the only key issue. Other key issues are management, deliverables, time to market, consistency, and open source has serious challenges there unless you plant a stake and manage your own effort.

Don't overstate Redmond's fears. They are not running scared and looking to rent the extension on the house to travelers. They have recognized potential competition and like any good business are moving strategically to ensure they don't lose their position. The world is changing, and so will they, they've proven the ability to reinvent themselves more than once.

I tend to look at it and say wow, in a world of millions and millions of software efforts, with hundreds of millions of developers, many who have been trying to shoot down MSFT for decades, they are still here and going strong. That is not to be dismissed as luck or good packaging, it's just too hard to make it long term in software to be so flip. Stating they have added nothing to state of global computing would also simply be false. Many of you might not own computers as cheaply or for as long had it not been for Microsoft and the people/technologies they influenced over the years. You can hate them, point out their flaws, but dismissing them as pointless or entirely mistaken...is a mistake. You can learn a great deal from them, both good and bad, like anything else. One of Microsoft's crimes is being guilty of unprecedented success, and that always creates an army of opposition.

One day it'll be some other struggling OS and people will spit on Linux. Jeez it can be SO frustrating to talk to Linux folks. All they do is argue over distros, and tell eachother why the other guy's sucks. "All the real Linux devs are using..." blah blah blah. Please. JUST PICK ONE AND LET'S GET TO WORK.

Keep an open mind. There's a lot of different ways to get the job done, and over the years, one of the most consistent approaches for large scale development appears to be the MS model. I'm sure if LL thought they could get a similar market position with SL, they would pursue it.

I think you're right Tcoz, I've missed any such post of yours containing links to external LL activity. I've gone back over the thread and still can't find such info.

Probably not enough coffee yet, sorry. Just a link to the appropriate article needed, please.

Morg, you reposted it in your quote above...unless you didn't read your/my quote. That is a cut 'n paste from the front page of the Linden Labs site, the topmost article. I find the LL site more interesting than the SL one these days...it's really the only way to get a glimpse of what LL is up to outside of SL. I certainly hope you don't think I made that up, even sans the link.

Get that coffee!

1. Management -- none needed, wherever it goes is exactly right.

1. Deliverables -- Oh yes, please ensure that our coffee gets delivered.

1. Time to Market -- when the code WORKS, not 1 second before ... jeez.

1. Consistency -- it's not cache coherence, s/consistency/diversity/g

1. The need to plant a stake -- So do it.

Your list of problems exhibits a curious managerial agenda, Tcoz. If your real concern is employment prospects for non-technical managers wanting to control technical teams through irrelevancies, then you may indeed have a worry with some basis in fact.

So the correct approach is don't manage it, release it whenever who cares, put out as many versions of it as people want who cares about consistent usage or usability and so on.

I'd love to see that interview hah!

Sounds to me like you are sending LL a strong message. Since their software is a managed effort, was released (and is still released) in a far less than bug free state, they have stated vision and concerns as to the consistency of their product, and have most definitely put their stake in the ground and are sticking by it, you apparently think I, as well as Phil and his cronies are off their nuts. Well it's bound to be interesting company in the loony bin, however, I would suspect you'd be confused about which side of the glass you're on.

I'm not hearin' ya today Morg. Your saying projects don't need management, timelines, deliverable dates, and so forth and then slapping me with comments about failure to grasp reality. Let's try to stick to relating and contrasting our experiences, not judging them, please.

The correct approach is to not be so conceited as to think that one can manage the evolution of virtual worlds into what will become the open metaverse, when it's an unknown, evolving, emergent phenomenon. Unless you know of some clairvoyant managers, the process not only shouldn't be managed, but cannot be.

Straw man alert. I said release when the code works. Releasing software according to a managed timetable, regardless of whether the code works or not, is pure managerial bollocks that I've seen far too much of in industry --- and I've been there far too long to confuse good practices with bad.

You got that right. You can't define consistency and usability when one doesn't even know what kind of product the future holds.

No, I simply see you (and maybe Philip, despite occasional lip-service to the contrary) as sticking to the old practices of cathedral development.

One can do better than that.

This latter part of this discussion here is actually quite pointless if the consensus is that SL/LL is irrelevant to the development of an open metaverse, and that it's just one more proprietary product and company that will fall by the wayside and be lost in the mists of time.

The only reason why we're having the present discussion here after all is because Philip's statements made it seem possible that LL might try to stay in the forefront of a community push in that direction. Some saw open-sourcing the existing software as seedcorn, some as a statement of intent, and others as a way to help LL.

If it's not so, then who cares what happens to a small niche proprietary world ...

Here is an interesting blog entry by Mitch, one of the major investors in SecondLife:


March 11, 2005
Should Groove Have Gone Open Source?
Andrew from Blogging on the Free Web asks whether I discussed taking Groove open source with Ray Ozzie prior to the Microsoft acquisition. Unfortunately, one of the constraints of working in the proprietary world is the loss of liberty to be open about the details of business transactions (at least until I write my memoirs). Part of the joy of open source by the way is that it permits, if not virtually requires, a degree of transparency that is congruent with my approach to life and business.

What I can say is that I have consistently had substantive conversations over the past several years whenever the opportunity presented itself to discuss open source opportunities involving ALL of the companies I've made investments in and have at one time or another had board seats on. This includes Real Networks, Groove Networks, and Linden Lab (which makes Second Life, an increasingly popular virtual world).

There are advantages to going open source as well as challenges. In some cases it may even be necessary to forestall a competitive threat, i.e., do it before it is done to you. When I see businesses whose strategies involve defending a class of business model which is simply going to be obsolete going forward, my heart sinks about all the wasted effort.

Caveat altert: In a transitional era like the one we are in now, it is notable that it's harder to convert a code base developed in a proprietary context to be open source than it is to start from scratch for the same reason renovating a house completely is harder than new construction. Trust me if you haven't been through this. I have. This is one of the reasons it took seven years from the day Netscape announced it was going to open source the Mozilla browser to get to Firefox 1.0.

It typically requires a complete overhaul of the code and the development process, which is much harder than starting from scratch. Typically, the existing code base is not one which is amenable to community development. There is major code re-factoring and rewriting to be done, rethinking and reworking of API's, switching to open standards, and changing of the tool set to use transparent, community-oriented tools for source code management, issue and bug tracking, build status, knowledge base, and synchronous messaging.

On top of this, it requires investment to build a developer community and potentially much more investment to create a perception of trustworthiness.

Going the open source route ought to be considered but it is not always really viable given the resources at hand

Not every software package is meant to go open source.

I believe, SL being so community based, certain aspects of it definitely are.

Fascinating thread, I'd like to thank blaze to point it out for me and some others...

Well, before the war between open source and proprietary software breaks out again, and we all completely miss the point, perhaps I could just add my L$ 0.02...

Most companies that I know who have gone towards the route of "open source software" (and I'm personally still working for one...) have had a very distinct business plan: their core business was never on the application that was released as open source, but either on the services provided with that application, or from an entirely different source (ie. their core business was not software development). A very few just released the source code on an application that had paid itself over and over again, and the cost of the license simply scared customers off. It made more sense to give the application away for free and charge more for the services instead

Now, Linden Lab does certainly fit in that type of company (while Microsoft certainly does not). Their core business is hosting 3D content servers. They could either use third-party software for that, or develop their own. Given Philip's background, and the lack of a proper solution back in 1999 when he started to write what would become the "core" of Second Life, it's not surprising to see that they preferred to invest on their own software. So, unlike so many others, Linden Lab is currently the only company providing hosting services for 3D content. Others are merely entertainment/gaming companies, software developers, or 3D content creators (who happen to have developed their own platform for VR).

Under these assumptions, open sourcing the software makes sense, since it's not the software that provides a regular stream of income. However, there is a slight twist on this model. By open sourcing the software and giving it away for free, Linden Lab would actually give direct competitors - upcoming 3D content hosters - an enormous advantage: a working product, which has some 6 years of development, for free. You'd only need a competent system administrator, some cash, and a co-location facility, and you could run a competing grid - beating LL at its own game.

While this is unlikely to happen even if LL gives the open sourced software away for free, it is a possibility. So, this means that LL has to make sure they're able to get a return for their investment, by "controlling" ths software development and its usage.

I'm not siding with Tcoz completely. Perhaps unsurprisingly, since I've worked with software companies leading open source projects (well, neither as a developer or a project manager, lol, so I guess my information is probably inaccurate in many details...), what happens in this case is that a "core team" of company-paid employees mantain most of the code and directs the development. Volunteers contribute to the project with code which is quickly evaluated and integrated into the main branch of development. This model works pretty well with Apple and the Darwin project, or MySQL, or Sun, or so many others. I'd be so bold as to say that this is one of the best ways to deal with open source projects. The other "best way" is building the team from the bottom up, and have a consortium/foundation/organisation dealing with the central project management (eg. Debian Linux, Apache, Mozilla, and, well, W3 with HTML, I suppose). Still, exceptions exist - phpBB seems to be one of those projects that has grown huge without a central authority, and is certainly very successfull. The only criticisism I can make is that many of those projects who are not backed up by a company or an organisation tend to be highly risky - they may be a big success as easily as a big flop, and it's hard to tell what will happen soon.

So, project management is not really the issue with Second Life - LL would certainly provide that, and simply add a host of volunteers to help with the bug fixing, feature requests, and all sorts of stuff that gets added creatively and who nobody thought/planned before.

The issue is, making a profit from an open technology which could potentially be used by competitors to do a much better job with it, even if "competitors" simply mean "helpful individuals" in this context, and not really organisations (imagine thousands of volunteers "donating" their Internet-connected computers to host sims for free...).

A few examples have been suggested, like in-world advertising, and similar ideas that have sprung in the "old" New Economy. We all know how these worked out so I guess that Linden Lab has to do a bit more than that.

On my own blog (sorry, no shameless plugs this time, I've done enough on the forums already ) I suggested a few ideas. They're not really "mine" - they have been collected from input gathered either in-world, on the forums, and during RL conversations. One way is to think of Linden Lab as becoming the next "Network Solutions" of the metaverse. As most of you know, Network Solutions ran a "virtual monopoly" for almost a decade by managing the DNS root nameservers. For those that don't, you can easily understand that "someone" has to point your lovely www.mydomainname.com to a physical box. They charge a small fee for that.

In terms of Second Life, what this means is that Linden Lab could act as both a "certification authority" and as an enabler of peering agreements. The first idea was suggested on this thread (well, actually, I think that several people arrived at the same idea at the same time, hehe - similar minds think similarly!). If you have local (ie. sim-based) authentication, as opposed to "centralized" authentication, you need a way to make sure people cannot create accounts that have been used elsewhere. The beauty of this approach is that you need to ensure this only when creating your account. From there on, you can simply log in to the sim your avatar is tied to, and everything else will work fine. Even if you tweak with your client or server software to display a different name, this is just a local issue - people using the "official" client from LL will have the correct names displayed. So you'd look a bit silly hacking your name to be "Philip Linden" and bragging about it when everybody else in the metaverse would see you logged in as "Anonymous Coward"

Non-certified avatar names would simply be unusable outside of the sims they were first created. So you'd have an "isolated sim" in that case - very similar to what happens in intranets, where you can set up your computers' names as you wish, but if you haven't a "registered" name, you'd be unable to use it beyond the intranet.

The same would apply to servers connected to the metaverse: a digital certificate to be applied to all content there, to make sure it's unique, properly catalogued, and trackable to its origin (creator/owner/sim where it's stored). If this is done properly, you would even be able to make sure intelectual propriety is violated - or, if it is, you could easily track down the culprits. Of course, if someone running a non-LL sim has been a recurrent source of abuse, LL would cancel their certificates. That would mean that all those objects would simply vanish from the metaverse (and be only available at the local sim, for the very few avatars created there in the first place). Legally speaking, I'd guess that US law is able to deal with these cases pretty easily, since it's the same principle under which the digital certification authorities or the DNS system work.

So this would be one of the sources of income. How much should LL charge for them? Well, it sounds pretty easy to figure out: US $9,95 one time fee for an avatar certification, US $198/month for an ongoing certification of a metaverse-connected sim Sounds familiar, right? LL could give a discount on both fees, since they wouldn't be providing any technical support to either the avatars created on non-LL sims, neither to the sim itself.

But there is more to earn with "peering agreements". Imagine the best-case scenario: a parallel grid, operated by a LL competitor, is able to have the same amount of content and avatars created on "their" grid, as LL has on its own grid. This means that the traffic between both grids is almost the same - meaning that textures, anims, sounds, objects, avatars flow in both directions, in the same amount. Under these circumstances, it makes sense that no one charges the other for traffic. But now imagine the reverse. A single sim has just 20 avatars created there and a dozen objects. Almost all content will be downloaded from LL's "main grid", and the single sim will not contribute much to the overall metaverse. This is unfair for LL's grid - they're actually providing lots of hosted content for their "competitors", and getting almost nothing in return. The telecoms and major ISPs have dealt with this issue by devising "peering agreements". This mostly means that equal-sized peers don't pay anything for being interconnected - both share the same amount of content - but smaller-sized ISPs pay a large fee to get connected to the big ones. While this may seem unfair - it promotes a "cartel" of ISPs over the tiny independent operators, who struggle to pay their peering fees - it also contributes to a degree of self-regulation. Residents trust LL with their content. They would probably trust an independent organisation about the same size of LL. However, with open source server software, which you couldn't really know if it was "tampered with" in any way, and you couldn't really trust much the tiny grids. They would need to grow, building on their credibility, until they became large grids - and then, the peering agreements would be much nicer for them

So, under this model, Linden Lab would actually profit more by "giving the code away" than by the current model of a "centralized, proprietary grid". And I'm not talking about profitting more "ethically", or by "reducing costs of development" by using external volunteer developers to fix bugs and add features, but really, make more money, since others would expand the grid not only without extra costs for LL, but by paying for the privilege! And under this model, LL would not be "selling licenses" or "making people pay to use their wonderful technology". No: they would capitalize on an asset - a large grid at the "core" of the metaverse, which everybody wants to connect to, and pay for it - and keep strictly to their core business (regulating the way the metaverse is built), while at the same time putting a few safeguards in place by protecting content and avatars which are not under their full control. Sure, I expect that many people will create tiny, independent grids and not pay LL a dime for that privilege. I also expect those tiny, unconnected grids to be insignificant - or eventually "testing grounds" for amazing new ideas, too radical to be developed on the main grid - but they won't "survive" until they are interconnected to the "main grid". This is a similar development to the move that BBSes in the pre-Internet world made - some tried to stay isolated, but most tried to "join forces" and slowly interconnect themselves, first using their own techniques and protocols, later by simply "merging" with the bigger Internet. I'd expect the same thing to happen with the metaverse. And LL would still be able to keep their "control" of things.

Fascinating thread, I'd like to thank blaze to point it out for me and some others...

Well, before the war between open source and proprietary software breaks out again, and we all completely miss the point, perhaps I could just add my L$ 0.02...

Most companies that I know who have gone towards the route of "open source software" (and I'm personally still working for one...) have had a very distinct business plan: their core business was never on the application that was released as open source, but either on the services provided with that application, or from an entirely different source (ie. their core business was not software development). A very few just released the source code on an application that had paid itself over and over again, and the cost of the license simply scared customers off. It made more sense to give the application away for free and charge more for the services instead

Now, Linden Lab does certainly fit in that type of company (while Microsoft certainly does not). Their core business is hosting 3D content servers. They could either use third-party software for that, or develop their own. Given Philip's background, and the lack of a proper solution back in 1999 when he started to write what would become the "core" of Second Life, it's not surprising to see that they preferred to invest on their own software. So, unlike so many others, Linden Lab is currently the only company providing hosting services for 3D content. Others are merely entertainment/gaming companies, software developers, or 3D content creators (who happen to have developed their own platform for VR).

Under these assumptions, open sourcing the software makes sense, since it's not the software that provides a regular stream of income. However, there is a slight twist on this model. By open sourcing the software and giving it away for free, Linden Lab would actually give direct competitors - upcoming 3D content hosters - an enormous advantage: a working product, which has some 6 years of development, for free. You'd only need a competent system administrator, some cash, and a co-location facility, and you could run a competing grid - beating LL at its own game.

While this is unlikely to happen even if LL gives the open sourced software away for free, it is a possibility. So, this means that LL has to make sure they're able to get a return for their investment, by "controlling" ths software development and its usage.

I'm not siding with Tcoz completely. Perhaps unsurprisingly, since I've worked with software companies leading open source projects (well, neither as a developer or a project manager, lol, so I guess my information is probably inaccurate in many details...), what happens in this case is that a "core team" of company-paid employees mantain most of the code and directs the development. Volunteers contribute to the project with code which is quickly evaluated and integrated into the main branch of development. This model works pretty well with Apple and the Darwin project, or MySQL, or Sun, or so many others. I'd be so bold as to say that this is one of the best ways to deal with open source projects. The other "best way" is building the team from the bottom up, and have a consortium/foundation/organisation dealing with the central project management (eg. Debian Linux, Apache, Mozilla, and, well, W3 with HTML, I suppose). Still, exceptions exist - phpBB seems to be one of those projects that has grown huge without a central authority, and is certainly very successfull. The only criticisism I can make is that many of those projects who are not backed up by a company or an organisation tend to be highly risky - they may be a big success as easily as a big flop, and it's hard to tell what will happen soon.

So, project management is not really the issue with Second Life - LL would certainly provide that, and simply add a host of volunteers to help with the bug fixing, feature requests, and all sorts of stuff that gets added creatively and who nobody thought/planned before.

The issue is, making a profit from an open technology which could potentially be used by competitors to do a much better job with it, even if "competitors" simply mean "helpful individuals" in this context, and not really organisations (imagine thousands of volunteers "donating" their Internet-connected computers to host sims for free...).

A few examples have been suggested, like in-world advertising, and similar ideas that have sprung in the "old" New Economy. We all know how these worked out so I guess that Linden Lab has to do a bit more than that.

On my own blog (sorry, no shameless plugs this time, I've done enough on the forums already ) I suggested a few ideas. They're not really "mine" - they have been collected from input gathered either in-world, on the forums, and during RL conversations. One way is to think of Linden Lab as becoming the next "Network Solutions" of the metaverse. As most of you know, Network Solutions ran a "virtual monopoly" for almost a decade by managing the DNS root nameservers. For those that don't, you can easily understand that "someone" has to point your lovely www.mydomainname.com to a physical box. They charge a small fee for that.

In terms of Second Life, what this means is that Linden Lab could act as both a "certification authority" and as an enabler of peering agreements. The first idea was suggested on this thread (well, actually, I think that several people arrived at the same idea at the same time, hehe - similar minds think similarly!). If you have local (ie. sim-based) authentication, as opposed to "centralized" authentication, you need a way to make sure people cannot create accounts that have been used elsewhere. The beauty of this approach is that you need to ensure this only when creating your account. From there on, you can simply log in to the sim your avatar is tied to, and everything else will work fine. Even if you tweak with your client or server software to display a different name, this is just a local issue - people using the "official" client from LL will have the correct names displayed. So you'd look a bit silly hacking your name to be "Philip Linden" and bragging about it when everybody else in the metaverse would see you logged in as "Anonymous Coward"

Non-certified avatar names would simply be unusable outside of the sims they were first created. So you'd have an "isolated sim" in that case - very similar to what happens in intranets, where you can set up your computers' names as you wish, but if you haven't a "registered" name, you'd be unable to use it beyond the intranet.

The same would apply to servers connected to the metaverse: a digital certificate to be applied to all content there, to make sure it's unique, properly catalogued, and trackable to its origin (creator/owner/sim where it's stored). If this is done properly, you would even be able to make sure intelectual propriety is violated - or, if it is, you could easily track down the culprits. Of course, if someone running a non-LL sim has been a recurrent source of abuse, LL would cancel their certificates. That would mean that all those objects would simply vanish from the metaverse (and be only available at the local sim, for the very few avatars created there in the first place). Legally speaking, I'd guess that US law is able to deal with these cases pretty easily, since it's the same principle under which the digital certification authorities or the DNS system work.

So this would be one of the sources of income. How much should LL charge for them? Well, it sounds pretty easy to figure out: US $9,95 one time fee for an avatar certification, US $198/month for an ongoing certification of a metaverse-connected sim Sounds familiar, right? LL could give a discount on both fees, since they wouldn't be providing any technical support to either the avatars created on non-LL sims, neither to the sim itself.

But there is more to earn with "peering agreements". Imagine the best-case scenario: a parallel grid, operated by a LL competitor, is able to have the same amount of content and avatars created on "their" grid, as LL has on its own grid. This means that the traffic between both grids is almost the same - meaning that textures, anims, sounds, objects, avatars flow in both directions, in the same amount. Under these circumstances, it makes sense that no one charges the other for traffic. But now imagine the reverse. A single sim has just 20 avatars created there and a dozen objects. Almost all content will be downloaded from LL's "main grid", and the single sim will not contribute much to the overall metaverse. This is unfair for LL's grid - they're actually providing lots of hosted content for their "competitors", and getting almost nothing in return. The telecoms and major ISPs have dealt with this issue by devising "peering agreements". This mostly means that equal-sized peers don't pay anything for being interconnected - both share the same amount of content - but smaller-sized ISPs pay a large fee to get connected to the big ones. While this may seem unfair - it promotes a "cartel" of ISPs over the tiny independent operators, who struggle to pay their peering fees - it also contributes to a degree of self-regulation. Residents trust LL with their content. They would probably trust an independent organisation about the same size of LL. However, with open source server software, which you couldn't really know if it was "tampered with" in any way, and you couldn't really trust much the tiny grids. They would need to grow, building on their credibility, until they became large grids - and then, the peering agreements would be much nicer for them

So, under this model, Linden Lab would actually profit more by "giving the code away" than by the current model of a "centralized, proprietary grid". And I'm not talking about profitting more "ethically", or by "reducing costs of development" by using external volunteer developers to fix bugs and add features, but really, make more money, since others would expand the grid not only without extra costs for LL, but by paying for the privilege! And under this model, LL would not be "selling licenses" or "making people pay to use their wonderful technology". No: they would capitalize on an asset - a large grid at the "core" of the metaverse, which everybody wants to connect to, and pay for it - and keep strictly to their core business (regulating the way the metaverse is built), while at the same time putting a few safeguards in place by protecting content and avatars which are not under their full control. Sure, I expect that many people will create tiny, independent grids and not pay LL a dime for that privilege. I also expect those tiny, unconnected grids to be insignificant - or eventually "testing grounds" for amazing new ideas, too radical to be developed on the main grid - but they won't "survive" until they are interconnected to the "main grid". This is a similar development to the move that BBSes in the pre-Internet world made - some tried to stay isolated, but most tried to "join forces" and slowly interconnect themselves, first using their own techniques and protocols, later by simply "merging" with the bigger Internet. I'd expect the same thing to happen with the metaverse. And LL would still be able to keep their "control" of things.