Enterprise Virtual Worlds to See Real-World Growth

3D Virtual World Enterprise Forecast3-D virtual world applications for enterprise use will grow into an industry earning $8 billion to $10 billion in annual revenue by 2014, according to a new report from GigaOM Pro (subscription required). Today, virtual worlds are primarily associated with role-playing games and avatar-based chat, but analysts Kris Tuttle and Steve Waite say they will gain widespread corporate adoption as a platform for long-distance conferencing and training, job fairs, and other business uses in the years ahead.

Companies are likely to embrace virtual worlds for such applications first, the authors argue, because they offer a cost-effective, productivity-boosting (not to mention “green”) alternative to air travel. After reaching a critical mass in the next 12-24 months and doubling year over year, the industry will soon be earning billions of dollars in annual revenue. (Anticipating skeptics, the authors note that the existing market for online enterprise training and collaboration already earns that much just in direct costs alone.)

As for the major players in this burgeoning space? Tuttle and Waite name IBM (s ibm) and Cisco (s csco), two companies that have been developing virtual world/online collaboration solutions for years, with Adobe (s ADBE), Citrix (s CTXS), Oracle (s ORCL?), and Dassault Systems (s DASTY) as other contenders to watch closely. They also note that the market’s growth will provoke fierce competition among the many enterprise virtual world solutions already out there — OLIVE, Second Life, OpenSimulator, Project Wonderland, to name just a few — leading to a shakeout in the industry. After this tumult, a few dominant behemoths and successful niche players will emerge, though it’s still unclear if the winners are already on the market, or still in development.

In any case, the report recommends that companies large and small should immediately start pilot programs based around virtual worlds. “Because the technology is delivering cost savings and improved operations,” they argue, “the time to begin is now.”

Tuttle and Waite’s full report, “Virtual Worlds for the Enterprise Market,” is now available on GigaOM Pro (subscription required).