Trade Shows Go Virtual at ON24; The Civilized Alternative to Second Life?

11/3/11Follow @wroush

The boardroom windows at ON24 look out over San Francisco’s Moscone Center, the city’s largest convention complex. Every year, Moscone is home to giant events like Apple’s Worldwide Developer Conference, Oracle OpenWorld, Salesforce.com’s Dreamforce, and the MacWorld Expo; in fiscal year 2009-2010, more than 919,000 registered event attendees visited the complex.

But as busy as Moscone is, the number of business people who travel to trade shows and conventions is actually dropping. Moscone’s 2009-2010 attendance was down almost 20 percent compared to 2007-2008 levels. The economy is partly to blame, of course—but so is technology. In 2009, Cisco Systems canceled two San Francisco events and said it would hold digital conferences instead, saving $50 million. And in the growing movement to replace big, expensive physical events with cheaper virtual ones—where the booths are made from bits and attendees let their mice and keyboards do the walking—ON24 wants to take the lead.

ON24 CEO Sharat Sharan

After surviving a brush with death back in 2002, ON24 emerged as one of the country’s leading providers of webcasting technology, which allows companies to stage live online presentations and webinars for employees, trainees, or sales prospects. On the strength of that business, which brings in at least $25 million in revenues every year, the 275-employee company became profitable back in 2009, and is still growing at 25 to 30 percent per year, according to CEO Sharat Sharan.

But whereas a webcast might last 45 minutes, a virtual event can go on for a day, a week, a month, or forever—providing many more opportunities for the host to collect leads that might turn into sales down the road. So ON24 is aggressively pushing its newer “Virtual Show” and “Virtual Briefing Center” technologies, which are both built on a newly overhauled back-end called Platform 10.

This month ON24 is gearing up for VUE2011, a virtual show about virtual shows. Slated for November 17, VUE2011 will be emceed by the San Francisco Giants’ shaggy-bearded relief pitcher Brian Wilson and will be set amidst 3D simulations of San Francisco landmarks such as the Golden Gate Bridge and the Chinatown Gate on Grant Street (see the video on page 3 of this story). In Wilson’s honor, the conference’s tagline will be “Fear the beard, not the technology.” (Of course, after the Giants’ lackluster 2011 season, the beard has lost a bit of its fearsomeness.)

“What we do better than anybody else in the world is live virtual events,” says Sharan. Webcasts are still “the foundation” of the business, he says, but ON24 is growing into a “one-stop shop for webcasting, virtual events, virtual briefing centers, demand generation, corporate communications, and training.” If the flying avatars, corporate islands, and virtual stores of Second Life represented a wild, uncontrolled experiment in virtual commerce and communication, ON24 is the company coming along behind with a broom, civilizing and detoxifying the virtual-spaces concept for business users and serious marketers.

But to someone from the dot-com boom years, when ON24 was founded, the current company would be unrecognizable. It started out in 1998 as a distribution hub for video press releases, then evolved into a provider of streaming, on-demand financial news about the Internet economy—sort of like Bloomberg TV, but a decade ahead of its time. The company grew “exponentially,” according to Sharan. But after the dot-com bust of 2001, the upscale retail investors who had been ON24′s main subscribers lost interest, and the business fell apart.

“Sometimes you hit a wall and you die, and sometimes you get to continue as a management team,” Sharan says. After burning a million dollars a month through most of 2002, he and his co-founders realized that the same streaming technology they’d used to publish newscasts could support corporate webcasting. The company slimmed from 120 employees down to 35, recapitalized with help from Rho Ventures, Canaan Partners, and U.S. Venture Partners, and landed two big life-saving financial-industry customers, Credit Suisse and Merrill Lynch.

Sharan took the opportunity to focus the company’s engineers on eliminating the waits, interruptions, audio snafus, and other hiccups long associated with Web video. “If you are doing a large webcast with north of 20,000 people, you can’t be down for even 30 seconds,” he says. By building a reputation for reliability and scalability, ON24 grew into one of the leading webcasting companies by 2006, earning revenue on a combination of annual subscriptions and one-off event charges.

In 2007, Sharan says, “I started hearing from our customers that there was this new category emerging and beginning to be used for demand generation—live, full-day-long virtual events. It became very clear to me that we had to have either a build or buy strategy on that. We decided to build it.”

To understand the type of virtual event ON24 supports today, don’t picture a fully immersive video-game world. The company’s Web-based events can include some 3D environments, but they’re usually more like stage sets than fully explorable environments. “This is not Second Life, where there are people flying around and giant avatars giving you the finger,” says Sharan. “These are controlled business environments.”

In ON24′s virtual spaces, content is king. The screens are peppered with buttons, links, or videos designed to help prospective customers find product information or connect with company representatives. It’s all organized using visual metaphors drawn straight from the world of physical trade shows or office buildings. This sample webcast produced for IBM, for example, frames a webcast and slide show within a virtual auditorium. The image at left shows a virtual convention-hall atrium, with doors leading to a virtual auditorium, exhibition hall, communication center, and resource center.

Platform 10, which the company released in March, includes a kind of editing studio that lets event hosts customize their virtual show spaces. They can include slides, media players, live chat, Twitter feeds, LinkedIn sharing, data sheets, white papers, case studies, virtual business cards, and about 30 other modules and widgets, according to Mark Szelenyi, ON24′s senior director of webcasting platform product management. The resulting content is all browser-accessible, with no Webex-style client downloads required. “It’s just like going to a trade show and interacting in the booth,” Szelenyi says. “I used to produce physical events at 10 times the cost, but with this you can do it globally and have a greater reach.”

But in principle, a virtual event could be designed with any backdrop at all—from a Monopoly board to the skyscrapers of Coruscant. So why would ON24 so often fall back on the old convention-hall metaphors? “It’s early in the evolution of the technology, and people want familiarity,” Sharan says.

And while virtual booths might look old-fashioned, they have some important advantages, he says. “If I’m at a physical show and I put my business card in the fishbowl, they don’t know who I am. But if you are a CEO and you walk into Oracle’s virtual booth, they know exactly who you are, and how big your company is. And they can have people staffing the booth, from product managers to tech people, so you can select who you want to talk to.”

At the end of the day, Sharan argues, both physical and virtual trade shows are about marketing, demand generation, and sales. The company’s pitch is that webcasts and virtual shows offer customers a more flexible, self-service experience, while giving companies a more automatic way to capture leads. And there’s one more benefit to webcasts and virtual shows: you never have to tear them down and go home. In an interesting echo of its original business plan, ON24 now offers a portal called Insight24 where visitors can browse more than 10,000 recorded webcasts, white papers, and virtual events from 300 ON24 customers, from giants like EMC and SAP to startups like Apperian.

“We were down to 35 people in 2002, but we’re now five times bigger than anybody else in this space,” Sharan boasts. “In fact we are creating the space. We see a green-field marketing opportunity. I can almost guarantee you that companies that are doing 1,000 events a year today will, in three years, be doing only 700 physical events and 2,000 virtual ones.”

So if Moscone Center looks a little emptier the next time you walk by, you’ll know who to blame.

Here’s a short video courtesy of ON24, showing how the company developed the 3D environments for VUE2011.

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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