More Than Second Life in IBM’s $100M Spend

What comes after Second Life?

After IBM  CEO Sam Palmisano took to the popular virtual world Second Life to announce a $100 million spending plan on virtual worlds for real-world business problems, what’s comes next?

Plenty, IBM officials told IBM is funding development of simplified business engines to help small businesses tap into Web 2.0, and real-time translation services. One of the projects is called “Digital Me” to create a secure, user-friendly device to help people store their personal content. Another is branchless banking for the masses to help financial institutions provide basic banking services to remote or inaccessible populations in fast-growing emerging markets.

There is one looking at an integrated mass transit information system; an environmental unit focused on advanced water modeling, water filtration via nanotechnology and efficient solar power systems.

The new business ideas are the product of a collaborative effort among IBM employees and select partners and customers to determine new directions that could drive both significant business growth and improvements to human health, the environment and other global concerns.

The ideas, the product of a company-wide collaboration called Innovation Jam, helped fuel new ideas but also helped validate some things the company was already doing, said Jurij Paraszczak, IBM’s director of industry solutions and venture capital group relations manager.

IBM expects to generate almost immediate returns from some of the ideas, but recognizes that others will take longer to mature into viable business models.

“We expect that for most of these, there will be a very good return, indeed. In some cases it could be better than ten to one,” he told

Paraszczak said the $100 million investment, to be divided about evenly between the 10 new businesses, will be spent over two years.

And don’t forget, he added, that it took the business community a good five years to figure out how to create solid businesses off the Internet.

“It was a new opportunity to create new business for IBM and a way to refocus our efforts into areas we may not have launched into immediately by ourselves,” he said.

For instance, without the stimulus from Innovation Jam, he said, “we may not have taken the initiative to say, what can we do with photo-voltronics and improving the optimization of the power supply.”

He said that contributors were adamant about creating businesses that “are about what needs to happen in the world, not just for IT, but for healthy living or a healthy planet.”

He does think some new businesses could generate quick results: a smart healthcare payment system that overhauls healthcare payment and management systems through the use of small personal devices; an electronic health record system that supports the automatic updating of and pervasive access to personal healthcare records and the integration of patient data with global payer/provider transaction systems; and intelligent utility networks, which will lower power consumption in the world’s power grids by building in “intelligence” in the form of real-time monitoring, control, analysis, simulation and optimization.

Virtual worlds can “provide capabilities we don’t have in real life that can be used in the context of others’ capabilities that don’t exist in real life either.”

He said IBM doesn’t expect this idea to generate any real business in the short term. “We’ve got the technology team in place, but nobody is responsible for bringing that out to market yet because we’ve got more work to do.”

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