Monday, March 19, 2007

DiamondWare - A Gamer's Best Friend - and a Company to Watch

Anyone following the gaming world or the Second Life phenomenon would know by now that Second Life announced the addition of voice into its platform on February 27. That�s an old story by now, but I just want to connect the dots back to DiamondWare, and tell you the story that isn't getting much play - yet. I�ve known this company for a few years now � and we�ll get to that in a moment.

I�m telling you this story because I think it needs to be told, and also because I�m one of the first who can tell it. I�ve had the benefit of a full briefing and demo of their conferencing platform, so I�ve seen it and heard it first hand. The only other way to experience it is if you�re part of the Second Life beta, or involved with one of the many trials DiamondWare is currently running with some big name companies. At the Game Developers 2007 Conference held two weeks ago, DiamondWare, in fact, provided a hint of what�s coming. They issued a series of announcements at the show about gaming deployments that will soon be commercially available, namely Auran�s Fury, and Virgin Games�s A World of my Own.

But those are NDA scenarios, so for most of you out there, I�ll likely be the first person you�ll hear about this from. Here we go�

First, I�ll just work backwards to name the players that bring us to DiamondWare. SecondLife is the largest public deployment of their 3D voice software, and the virtual world of Second Life was created by San Francisco-based Linden Labs. Their February 27 press release tells the basic story, but makes only a passing reference to the technology behind 3D voice, which involves two companies � Vivox and DiamondWare. Vivox provides the platform to support 3D voice, but the technology itself has been licensed to Vivox by DiamondWare. This relationship has been in the works for some time, as DiamondWare announced their successful demonstration with Second Life last September. It�s only now coming to market.

I should also add another thread to the story here. Vivox is another Jeff Pulver venture � he�s a co-founder and their Chairman. Jeff is an avid Second Lifer, and has his own virtual conference space there called Pulveria. He gave a great real-time demo of this at his Fall VON keynote last September, and I�m one of the bloggers who commented about it. Jeff posted about Second Life adding voice on February 28, but only mentioned Vivox. That�s understandable, but if that�s all you�ve read about this story, then you�re missing the DW connection. Given that it�s VON this week, I thought it would be timely to mention this, as I'm sure you'll be hearing about Second Life and Pulveria a few times during the show. Unfortunately I won�t be at the show this time, but I�m not hard to find if you need me.

So what�s the big deal with DW? You don�t have to look far through all the press about DW�s news with Second Life to get the basic idea. It�s typically described as immersive, spatial audio, with crystal clear sound that is highly adaptive to the real-time environment you�re in. For Second Lifers or gamers, it can be your best friend. I think of it as bling for your avatar. It�s easy to see how it makes these worlds much more interesting, but it�s the reality factor that DW brings that makes it really cool. When you�re in a multi-player gaming environment, or trying to have a conversation in a crowd inside SL, that�s where DW really stands out.

I recently got set up to do a personal demo with DW�s CEO, Keith Weiner. He kindly sent me a USB stereo headset and I downloaded the application, and we got connected. You need to have a decent headset to properly experience this. All I can tell you is that this works really well! Definitely not what you�re used to, and you can tell right away this is a much more life-like experience � a bit like the buzz you get from telepresence compared to conventional video conferencing.

This wasn�t a gaming or SL demo � it was a conventional conferencing application, and even in this simple scenario, you can get to experience how cool this is. First off, this is stereophonic sound, so the quality is very good right off the bat (32 KHz if you�re keeping score). Most conferencing is mono, and Keith cited Skype as an example that many of us are familiar with. It�s certainly a radical improvement, and it�s hard to imagine going back.

Here�s what�s really neat about the experience. On the screen you can see the names and positions of everyone sitting around the conference table. As each person speaks, you hear them in their positional or spatial context. For example, the person on your left is heard in the left channel. It�s much easier to follow the flow of conversation, and things get really interesting when multiple conversations occur, or people start moving around the room.

The experience is very life-like, and is much easier to follow things when different people start talking. Similarly, DW responds in real time as people move about � their volumes rise and fall as they move, and Keith refers to this as �proximity monitoring�. This all sounds very natural and simple in the real world, but the magic of DW is the ability to recreate it in a digital world.

Of course, I can only express the experience in words here, but the message is clear � it sounds great, and this is a big step forward. In some ways, it�s a bit too good. I commented to Keith that DW�s clarity created awkward moments when nobody was saying anything. There was total silence, and it really felt like the signal had cut out and I was off the call (which has happened to all of us on concalls, right?). More than once I had to ask if anyone was there. Well, that�s why they add white noise, right?

Another observation was that DW picks up EVERYTHING. So, when you�re on a call like this, don�t yawn, swallow, click your teeth, mumble under your breath, or make any side comments. Everyone will hear you, and they�ll probably be able to tell it was you! So, I suggested to Keith he may want to provide some concall etiquette tips for first time users. It reminded me of my Telepresence demo with Cisco. The experience was very life-like, but the presenters on the Cisco side of the table (who were far away in San Jose) came across a bit stiff, and looked like newscasters. These technologies are very new, and better than what we�re used, and we�re just not very media-aware yet of how best to use them. It will take some getting used to, but this is a good thing.

I should also add that voice quality itself is not DW�s secret sauce. It�s based a royalty-free Polycom codec, Siren 14 - G722.1. The real power of DW is that it�s �massively scalable�. Keith has had this in mind from the beginning, and that�s a big part of the vision for the gaming world, which will soon start seeing thousands of players online at the same time using voice. And of course, Second Life, which claims over 3 million registered users, will be a huge proof point for DW�s scalability.

The gaming world is an obvious market for DW, and they are positioning themselves very nicely there. Aside from the recent news items demonstrating their traction in this market, Keith explained how DW is already integrated into 4 of the top 6 middleware solutions for gaming. Also, while SL itself is a big deal for DW, that�s only the beginning.

Now, it�s time to segue from the gaming space to the enterprise market, which I think is where things get really interesting. SL isn�t just about people who want to have fun in a virtual world. Keith noted that 40 of the Fortune 500 companies � as well as several universities � are using SL to collaborate � such as holding meetings or doing presentations there. There�s a lot going on in SL with big companies that is anything but virtual, and a recent Investors Business Daily article is a great place to read more. They have already recognized the power of virtual communities for business applications, and with voice in the picture now, this space becomes more relevant to them.

Here�s why � collaboration is hotI�d say it�s THE trend right now in IP, especially in the business market. Voice is what makes collaboration really effective, and that�s where DW really wants to play. SL will give them a great proving ground for this, plus they will gain tremendous experience from the gaming market. I think this is what will set DW apart in this space. By adding this caliber of voice experience to gaming, DW is allowing gamers to collaborate like never before, and guess what? This is what a lot of techhies and early adopters love to do. Gamers are going to create a great template for how to do real time, multimedia collaboration in the business world, and DW is right in the middle of this.

Not only that, but gamers are paying real money to do this! We�re not talking about a free service here. These are the building blocks for new applications with real business models that can deliver real benefits to businesses. Futhermore, DW can be a platform for a hosted solution. Think about how this opens the doors for all kinds of players who want to raise the bar with scalable conferencing and collaboration solutions. It could be Cisco, it could be IBM, it could be Microsoft, it could be Apple (the iPhone could support gaming) it could be AT&T, it could be Time Warner, it could be Sony, it could be Google. You get the idea. And if you want to bring it into the home, DW supports SurroundSound, and could be part of an IPTV bundle.

You might also be thinking about how DW�s 3D audio could be great for things like music downloads, movies, TV, video, etc. All well and good, but it�s not their focus right now. DW is really about two-way, interactive, collaborative communication, whereas these are all static, one-way communication modes. However, we�re not too far away from somebody wanting to use this on platforms that support multimedia collaboration. Just like gaming, it doesn�t take much to see creative types embrace this to virtually create music or video content online. It�s going to happen�..

I�ll conclude by saying that the stars seem to be lining up nicely for DW, and SL is really putting them on the map. The company has always been under the radar, mainly due to lack of a commercial application that we could actually use. They�ve been very fortunate to be kept going all this time by government and military R&D contracts. Much like how so many Israeli IP communications got their start in the military, DW has come out of the same milieu in the U.S.

I think this is important, as DW has gained experience on some interesting projects they could not have gotten any other way. And now all that R&D is coming to commercial fruition, and DW is a viable company without any debt. This is a very rare combination of events. I can�t think of too many companies that have survived this long without the benefit of VC backing or revenue-generating customers to keep them going. DW has had the luxury of all this R&D and lots of patents that should give them a pretty strong head start against anyone else trying to duplicate what they�ve done.

If you�ve stuck with me to read this post to this point, and you�re an investor who understands this space, I�d say DW is primed for big things. You�ll have to track Keith down, though, to see what he wants to do. Just remember where you heard it first!

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