Teesside University keying in to a new world of business deals

Oct 16 2009 by Jez Davison, Evening Gazette

TEESSIDE University is weeks away from going live with a revolutionary ‘online city’ which enables firms to buy and sell goods without committing a single penny to production.

DLAB - a team of researchers and digital specialists within the university - said they were in advanced discussions with “five or six companies” to trial the virtual city, a business-to- business community built on 1,600 digital hectares with room for more than 6,000 avatars.

The concept is a move forward from a previous DLAB model based around the popular social networking phenomenon, Second Life.

Last year DLAB had been in talks with national retailers to trial the old model but has since developed a more advanced version that can open up the virtual world to all sectors.

Deputy director Phil McClenaghan said: “We wanted to move away from targeting particular markets and provide an environment where businesses of all types can explore and build supply chains and partnerships.

“Second Life has been compared with anarchy - it has few rules and doesn’t reflect the professional environment in which a company operates in the real world. This new model does.”

The online city has room for more than 3,000 companies, which can lease a plot of land from as little as £1,000 per year.

Local firms are ready to capitalise on a virtual goods market that is estimated to be worth around $5bn in Asia alone and expected to grow in the US from just over $1bn this year to $1.6bn in 2010.

Guisborough entrepreneur Paul Drake has launched a new service, Sapere Store, enabling cash-strapped start-ups to rent an e-commerce shop.

He said the platform could be developed so that firms could test demand for their goods and services before committing to the sometimes “prohibitive” cost of setting up an online retailing operation.

He said: “I can see growth in that (virtual world) market.”

Steve Cochrane of Middlesbrough fashion retailer Psyche said the technology could revolutionise the sector by reducing the risk of buying in loss-making stock.

But others are yet to be convinced that the technology could benefit their business.

Sean Crooks of games firm 3rd Dimension Creations in Middlesbrough, said: “It could dictate how we market the product but we’d still have to make it first, so we wouldn’t save on production costs.”

DLAB says its virtual B2B platform is a world first and could create “hundreds of jobs” in the region.

Once live, it will allow users to test out a variety of applications in the same way that the Apple iPhone hosts anything from books to coffee recipes.

Mr McClenaghan said: “Like the iPhone, we’re not providing solutions; we’re providing opportunities to create solutions.”