February 6, 1998


Fishing in his pocket for what looks like a tiny black car-alarm zapper, Michael Deering, a Sun Microsystems distinguished engineer, stops in the hallway of Sun's Menlo Park (Calif.) facility, in front of a dark gray wall with a diagonal seam. He hits a button, and two panels slide apart, just as on Star Trek: The Next Generation. Inside is the "virtual portal," Sun's own version of the sci-fi "holodeck." But there are no Klingons here. If you don a lightweight headset with goggles, you're transported to the driver's seat inside a digitally rendered Chrysler minivan. Deering shrinks you to a doll's size, and the steering wheel looms above like a giant radar dish. In two more clicks, you're sitting in the backseat, looking forward.

Welcome to virtual reality, 1998 style.

Just a few years ago, tales of computer-generated worlds like this one were hot news. They inspired Hollywood movies and special effects, and filled Silicon Valley pubs with talk of how quickly cybersex would displace the real thing. Virtual reality, or immersive, computer-generated environments, were billed as useful for everything from simulating war games to helping car designers try out ideas inexpensively. Many of the stories focused on the dreadlocked and bearded Jaron Lanier, a larger-than-life evangelist for the technology, and his company, VPL Research. VPL led a charge by a dozen or so startups with such names as Sense8 and Fake Space Labs that hoped to cash in on VR to supply 3-D graphics, positional tracking, and even 3-D sound to computer-generated worlds.

And then, it all just seemed to fade to black. The Internet shoved VR aside as the media and digerati became entranced with real-time Web surfing. VPL went into Chapter 11 bankruptcy, and VR arcades never caught on. But for Deering and other virtual-reality pioneers, the work never stopped. And ever-faster computers made easier the gargantuan graphic-rendering task posed by VR. "The VR industry went underground," says Walter Greenleaf, chief executive of Greenleaf Medical Systems in Palo Alto, which today uses VR sensor technology hooked to computerized displays to help rehabilitate patients with hand and arm injuries. "And now, it could be ready to reappear."

Greenleaf is optimistic because Sun has moved into the driver's seat with a batch of valuable intellectual property developed by VPL. Business Week Online has learned that in 1997, Sun acquired the assets of VPL for about $4 million, including several recently issued comprehensive patents. Sun won't say much about what use it'll make of the patents, in part to avoid tipping its hand to competitors. But the graphics workstation maker says it will incorporate the VR technologies into Sun's "open standards" approach, which already includes elements of Java 3-D, a programming language Sun will bring to market in late February. That product could help reignite virtual reality, particularly networked virtual reality, which Sun and some others believe will be the next big advance in computer and networking interfaces.

Even though Deering has been doing VR development for years, Sun has never been aggressive in promoting it. And because the company doesn't do systems integration, it doesn't work closely with customers in high-profile applications that get headlines. However, in chips and systems that process data and render images, Sun has been steadily adding elements that allow for stereo goggles, position-tracking software, and other VR essentials. Moreover, the VR tools should enhance its position as a leading seller of workstations for computer-aided 3-D design. For instance, the VPL patents give Sun the fundamental elements of computer-generated environments, including technology required for networked computer interaction, image-rendering, and image-manipulation, and programming standards required for people to interact with each other in a virtual space.

Scott Kelly, vice-president for corporate development at Sun, who negotiated the acquisition, says the patents address Sun's central mission of improving user interfaces and computer interaction: "We believe virtual-reality network interaction is going to be the future of computing," he says. "Our hardware, software, systems, and chip design are going into supporting that belief. When we realized how fundamental the assets of VPL were, and how far-reaching they are to the future of computing, [the purchase] was a no-brainer," he adds.

The saga of how these patents became available is long and tangled. Lanier didn't invent VR. In fact, current Sun Fellow Ivan Sutherland envisioned the first virtual environments in the late 1960s. The federal government spent big sums on the technology for war-game and flight-simulation purposes, even for experimental battlefield surgical applications -- testing, for instance, whether a tank might carry a robot that a surgeon in a remote location could manipulate using VR. Deering first worked on VR as an engineer at French chipmaker Schlumberger before he joined Sun in 1988.

It was Lanier who coined the term virtual reality, however, and who integrated different pieces of technology into a complete system at VPL. Lanier was a math and musical whiz who started VPL out of his Palo Alto garage in 1984 with money he had made by programming an early Atari video game. Soon, he was hosting visits from such celebrities as Yoko Ono and the Grateful Dead, who were particularly intrigued with virtual instruments he created linking music and visual displays on the computer. The company had collaborations with such partners as toy company Mattel but had trouble executing its product development on time and was always short of cash. After bringing France's Thomson-CSF in as a partner in the early 1990s, VPL put the company's entire intellectual property portfolio up as collateral on some small bridge loans from Thomson. By 1993, the partners were warring, VPL was in disarray, and the company went into bankruptcy.

Lanier, frustrated and tired from fighting with Thomson, went on to other things, even making an album of experimental music that was nominated for a Grammy Award. But Lanier's friend Walter Greenleaf, to whom VPL had licensed all medical rights to its patents, refused to let VPL die or revert to Thomson. For several years he looked for potential partners, even negotiating a deal with health-care giant Johnson & Johnson to buy the assets of VPL out of bankruptcy before a management change scuttled that arrangement. Subsequently, Greenleaf approached Silicon Graphics, which had a big VR effort, and Sun. But he avoided Microsoft, he says. "We felt an 'intellectual property trust' could kill the industry," Greenleaf says. "We liked that Sun was committed to open systems." Adds Sun's Kelly: "We didn't want this to fall into the wrong hands and be used against us. The value of [avoiding] that alone would have justified the acquisition."

Deering says that computing power finally is becoming sufficient to make VR a real-world application, although the field still needs advances in displays, motion tracking, and software to realize its true potential. Deering figures that the computer processing power for virtual reality 3-D systems he's working with has improved by a factor of 100 in just the past seven years. Machines in the early 1990s were capable of rendering triangles -- the unit of color and shading in a 3-D image -- at the rate of 50,000 per second. Today's systems easily top 5 million triangles per second. By 2001, Deering maintains, Sun workstations will be able to generate at least 100 million triangles per second, so that when you "look around" in virtual space, the object you're viewing will be there instantly, instead of catching up with a split-second's lag time. "The only reason I'm allowed to give you that number is that we have no intention of letting Sun build anything that slow that year," Deering says.

So, will VR rise again with Sun at the controls? "Sun has not been known as a strong player in computer graphics in general," notes Ben Delaney, former editor of the VR newsletter CyberEdge Journal and now a consultant to the VR industry. He adds that Silicon Graphics and Hewlett-Packard have much higher profiles in the graphic-intensive workstation market. Kelly and Deering both acknowledge that Sun is wary of promoting VR too aggressively and overpromising, as many players have in the past. "We're going to keep gradually putting the pieces in place," says Deering.

Even without a boost from Sun, though, improved technology across the board is spurring companies as diverse as Motorola, Caterpillar, and Nortel to make VR a bigger part of their training and simulation efforts, according to Delaney. The market for fairly advanced VR systems -- which are more advanced than desktop 3-D systems, such as those that display games like Doom -- will grow about 40% this year, to about $650 million, he predicts. Those systems typically include stereo displays and motion-tracking devices. Delaney says that if Sun keeps the access to these technologies fairly open, it should stimulate more growth and progress for the industry.

As for Jaron Lanier? He didn't profit in any way from the sale of VPL's assets to Sun, though he's still involved with VR. At 37, he is still pursuing his music but is also the lead scientist for the National Tele-Immersion Initiative, a nonprofit basic-research effort aimed at funding and promoting research to improve virtual worlds. Lanier splits his time between Sausalito, Calif., and New York, and works with scientists on top university VR research teams at Brown University, the University of North Carolina, and the University of Illinois, among other schools. "We're trying to create more advanced versions of VR than have ever been seen before," he says. One possibility: wearable displays that would let a person work on a yellow pad of paper but allow a window to appear to pop up right off the pad with additional, useful information. He adds that "we're on the threshold of a dramatic breakthrough in virtual reality," which he predicts is only three years away.

Time will tell. Sun is still clearly pondering exactly how to use its new patents most effectively. But the technology does keep getting better. The only downside is that a rekindling of those pub conversations about cybersex is probably not far behind.

By Joan Hamilton in Menlo Park, Calif.

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