Linden Lab and IBM have announced that they're teaming up to run Second Life on servers inside IBM's firewall, for IBM internal projects. The two companies plan to pilot the service to allow other companies to run Second Life inside their firewalls by year's end, and make the service generally available later on.

Using the service being tested by IBM, its users will be able to log in to the private server behind IBM's firewall, and move back and forth between that and the public Second Life grid, taking their avatars and possessions with them.

IBM will use the service for conferences, special events, and meetings.

"This is really about satisfying a market demand," said Ginsu Yoon, Linden Lab VP for business affairs. "There are enterprises that can be very comfortable with a hosted service, and there are customers who really want to have things inside their infrastructure." Linden Lab wants to be able to serve both groups.

The IBM announcement comes at a tough time for Second Life. The service saw explosive signup and growth rates in late 2006 and early 2007, but growth stalled later in the year. The number of dedicated users -- people who spend significant amounts of time in-world -- has been flat since late last year, at about a half-million users. Overall, users have created 13.1 million Second Life accounts since the service launched four years ago.

Big companies flocked to Second Life for marketing last year, but since then many companies, including American Apparel, Starwood Hotels, and Pontiac, have left the service (although some, like Starwood, said they always planned only a limited-time engagement). Other companies, like IBM, Cisco Systems, and Playboy, continue to operate in Second Life. And the service has a thriving culture of small businesses that operate only in Second Life.

Among the problems driving users away: Second Life is unstable, difficult to use, and users need to be running relatively powerful desktop computers. Philip Rosedale, co-founder of the company, said last month he's stepping aside as CEO, and the company is searching for a new CEO who can bring veteran management skills.

IBM is using virtual worlds technologies from Linden Lab and Activeworlds to offer "rehearsals," or training exercises, to its services team, said Jim Spohrer, director of service research for IBM Almaden Research Center.

IBM simulates project management and customer interaction in virtual worlds, he said.

Rehearsal services in virtual worlds provide the benefits of of face-to-face rehearsals and role-playing, while saving time and travel costs, Spohrer said. Also, virtual worlds are flexible in ways that reality isn't. "You can experiment with a lot of alternatives and designs," Spohrer said. "Also, as you start developing these rehearsal services, you can start reusing the components from one service to another."

[The preceding article by Mitch Wagner first appeared in Worlds in Motion's fellow United Business Media publication, Information Week.]