Second Life to go open source

The creator of the burgeoning 3D virtual world expects it to grow even faster with outside programming help, David Kirkpatrick reports in a Fortune exclusive.

By David Kirkpatrick, Fortune senior editor

NEW YORK (Fortune) -- Aiming to take advantage of its already-impressive momentum, San Francisco's Linden Lab, developer of the Second Life virtual online world, will announce Monday that it is taking the first major step toward opening up its software for the contributions of any interested programmer.

The company will immediately release open source versions of its client software for Windows, Mac OS, and Linux. In order to enter and move around the Second Life service, users must download and run this software on their computer desktop. But now, says Linden CEO Philip Rosedale, independent programmers will be able to "modify it, fire it up and sign on with it." The company gave Fortune exclusive access to executives in advance of the change.

While this initial step will open up what is essentially the user's window into Second Life for modification, it will leave Linden Lab in control of the proprietary software code for all Second Life's backend services - the server software that makes the world exist. However, executives say that the company's eventual intention is to release an open source version of that software as well, once it has improved security and other core functions. They say they have been preparing for the open source move for about three years.

The client, or viewer, software now being open sourced is what enables users to control their avatars, or digital in-world personas, as well as communicate with other users, and buy and sell virtual goods and services.

"We think that if we open source Second Life its product quality will move forward at a pace nobody's ever seen," says Rosedale. Almost all of Second Life's in-world content is already created by the company's customers, the world's residents, using software created by Linden Lab. With it, residents build a vast variety of in-world experiences, ranging from sex clubs to skydiving stations and golf games, from a fantastic anime-themed city to virtual recreations of Dublin and Amsterdam. All are populated by the avatars, or virtual representations, of other users. Many users own land where they build homes and businesses.

Linden executives calculate that over 15 percent of Second Life's residents are currently writing code in the so-called "scripting language" which enables users to build sophisticated in-world creations. Today Rosedale says they are writing 7 million lines of new code every week, in order to do things like modifying a doorbell so that it sends an e-mail message when a visitor rings it.

"We feel we may already have a bigger group of people writing code than any shared project in history, including Linux," says Rosedale. While this is often elementary code, it means, he says, that "we have an army of people waiting to work on this." Adds CTO Cory Ondrejka: "Why wouldn't we leverage our community and give them the opportunity to make Second Life what they want it to be?"

Many soldiers in that army are professional programmers at companies like IBM (Charts), Sun (Charts) and Autodesk (Charts) which have employees working on projects in Second Life. In addition, Linden Lab calculates that 65 small new companies have arisen that help build products and services inside Second Life.

Improving the client code is urgent for the company. Says Sibley Verbeck, CEO of Electric Sheep, one of the largest in-world construction companies, with 30 employees: "Linden Lab has done extraordinarily well creating a platform for very motivated early adopters. But they have not made the front-end experience ready for the mass market. It's hard to learn, hard to use, and hard to find content even once you learn how to use it." He's confident, though, that "those barriers will be addressed very rapidly upon the adoption of this open source initiative." He says his own company, among many, has a big incentive to improve Second Life's client code.

Interest in Second Life - which is free for basic use - has grown dramatically with a quickening pace of press coverage in places like Reuters, Business Week, Time, Wired and The New York Times, as well as consumer publications and Web sites worldwide. New registrants were arriving at a rate of 20,000 per month last January but by October the number had soared to 254,000. But many were apparently thwarted by how difficult the service is to use. Only 40,000 of those October registrants were still using Second Life 30 days after they first joined, according to figures recently provided by Rosedale.

Linden Lab claims 2.5 million "residents," meaning people who have registered for Second Life. But the service has only around 250,000 active members who still sign in more than 30 days after registering. Nonetheless, that group of active users is currently growing at about 15 percent per month.

Linden Lab claims its move represents the first time a market-leading company has taken a proprietary product and released it instead as open source. Netscape, by contrast, only released code for its Web browser once Microsoft had overcome its one-time lead in the market. That code, of course, eventually became the base for today's popular Firefox.

CEO Rosedale says that opening up the software is good for Linden Lab: "We believe that if we open-sourced every single line of code we have ever written it would only increase our rate of growth." That's because, he says, Second Life is a business that shows what are called "network effects." In such a market, every incremental user makes the service of greater value to existing users. The more people there are in Second Life the more interesting it becomes.

Under the GNU General Public License that Linden is using, if competitors were to use its open source code to build their own virtual worlds, any improvement they make to the software would have to be shared publicly. That means it would give the most benefit to Second Life, so long as it remained the largest such world.

Rosedale and other executives say they fully expect there eventually to be multiple virtual worlds that use Linden's code, or that at least are interoperable with Second Life, so avatars can pass from one world to another. Says Rosedale: "Say IBM builds its own intranet version with our code that's somewhat different from Second Life. But it's probably not that different. A user may say 'Wow, this virtual thing IBM's built is pretty cool. Now I want to go the mainland.' And we have another customer."

IBM Vice President for Technical Strategy Irving Wladawsky-Berger, a close student of Second Life, heard about the impending move toward open source from a Linden employee. "They have the right thought," he says, "which is that open source things work with the marketplace. But this is a field in its infancy that will be very competitive. Linden Lab might end up with a huge leadership position in a certain class of tools for virtual worlds, but those might not be the right tools for, let's say, a surgeon learning a new procedure in an immersive online environment. Second Life can be wildly successful, but so can others."

Says Linden Lab Board Chairman Mitch Kapor: "The whole philosophy of the company is about empowerment, with the overwhelming majority of everything being built by the residents. So going open source is part of the logical progression of our business. The most open system is also what will foster the most innovation, because people will be free to experiment."

In total, the software for Second Life comprises five gigabytes of source code, according to Joe Miller, Linden's vice president for platform and technology development. He says that with the members of its community helping it improve the client software, Linden can devote more of its own efforts to essential work at the server level to enable Second Life to grow faster. Near-term, the company expects users will create code to address bugs and other problems, as well as do things like enable Second Life to run on cell phones, or add support for different kinds of multi-media content inside the world.

Linden Lab will review open source contributions to decide which outside features it will incorporate into its own official versions of the client software. Unofficial software will not be given customer support by the company. But it will shortly open a test version of its server "grid," so developers can try out their software before unleashing it in the real Second Life.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.