Screen Shot and All Photos: Forterra Systems

Forterra’s Leaders: virtual [left] and actual : Robert Gehorsam [top right], president; David Rolston[middle right], chief executive; Michael Macedonia[bottom right], vice president, national security division.

Software

Code three! Code three!” shouts a police officer over a radio. “There’s been an explosion at Global Financial Trust!” It’s every town’s nightmare: a mysterious explosion in the commercial center. Carnage. Chaos. Plumes of deadly black smoke. On this early morning in October, the city of Palo Alto, Calif., is preparing for the worst. “This is Stanford Medical Center standing by,” a hospital worker urgently replies. Doctors dash to the emergency room. Ambulances speed out front, their sirens blaring.

Fortunately, the scenario is not playing out in real life but on a laptop computer, which is projecting the animated scene on a screen in a small conference room in New York City. It looks like a video game, but it’s not SimHospital. The cartoon doctors and nurses making their way around the halls are being controlled by real people on PCs across the country. These people type commands to control the movements of the characters, from the speed of their strides to the expressions on their faces. Using headsets and microphones, they converse in real time. It’s all happening through just one application, for medical training, of a new software package called On-Line Interactive Virtual Environment, or OLIVE.

Developed by Forterra Systems of New York City and San Mateo, Calif., OLIVE creates virtual worlds for customers in health care, the military, and the media. MTV Networks uses OLIVE to create online worlds based on its television shows; surfers can take dips in pixelated hot tubs with bikinied beauties from the Virtual Real World or customize shiny hubcaps on a flame-red hot rod in Virtual Pimp My Car.

But most of OLIVE’s applications are available by invitation only, primarily for the purpose of training staff. The U.S. National Institutes of Health is creating a world that tests industrial workers’ skills at responding to emergency disasters—think guys in hazmat suits wandering through toxic sludge like something from Doom. Retail chains use OLIVE to run employees through mock scenarios. In one ­demonstration, a new cashier inside a virtual surf shop has to cool down a hotheaded customer (operated by a corporate trainer) by choosing the right mix of body ­language and dialogue.

“There’s a generation coming into the workforce that sees nothing unusual in a world unfolding on a computer screen,” says Steve Prentice, vice president and director of research for Gartner Research, a technology research firm based in Stamford, Conn. “Also, complex environments are becoming more critical, and the cost of staging real-world simulation training exercises is escalating.”

Investors are taking notice. Virtual Worlds Management, a tracking firm in Austin, Texas, says that technology and media firms have put more than US $1 billion into 35 virtual-world companies, chief among them Club Penguin, a children’s site that the Walt Disney Co. recently acquired for $700 million. Forterra just received seed capital for OLIVE from In-Q-Tel of Arlington, Va., the strategic investment firm of the U.S. intelligence community (fittingly enough, the amount of the capital was secret).

Of all the fantasies that have emerged from the minds of geeks, none compares to the virtual world—a jacked-in, fully ­immersive, mind-blowing, body-rocking, computer-generated faux reality imagined in works as varied as Videodrome, The Matrix, Star Trek, Snow Crash, and the novels of Ray Bradbury and William Gibson. The virtual world offers escape from the drab responsibilities of work and home life. It also links up, at very low cost, like-minded people otherwise divided by the barriers of distance, occupation, and country.

“It’s part of the grand quest of our species to bridge gaps and find more and more ways of connecting,” says Jaron Lanier, the dreadlocked scholar-in-residence at the University of California, Berkeley, who is credited with coining the term virtual reality. “On that basis, it’s a wonderfully romantic thing to do.” There’s just one problem: no one has yet been able to deliver much more than a cartoonish world inhabited by jerkily moving polygonal pterodactyls, accessed through clunky headsets. Virtual worlds have been excruciating, for the most part.

No one knows this better than David Rolston, Forterra’s chief executive officer, who fell in love with the idea long before there was a practical way to implement it. After completing a Ph.D. in computer science and artificial intelligence and an M.S. in management systems engineering at Arizona State University in Tempe, Rolston spent years building out the early Internet. He worked on artificial intelligence for Honeywell, on software simulation for a start-up called Multigen-Paradigm (where he was chief executive), and on graphics chips for ATI (where he was vice president of engineering). He continued to nurse an interest in virtual worlds during his days at Silicon Graphics in the mid-1990s.

“We’d do demonstrations of virtual worlds, but at the end we’d say, ‘By the way, you have to buy a $500 000 computer to run this,’ ” he says. “Then it’d get really quiet.” Reason: most of the hardware capable of running a virtual world was in the hands of the military, which had invested heavily in simulation technology. So that’s where Forterra went for some of its first customers—and also for some of its talent. In August, Forterra hired Michael Macedonia, a Ph.D. in computer science who had been running the U.S. Army’s simulation, training, and instrumentation program in Orlando, Fla. He estimates that the mili­tary spends $10 billion a year on simu­lations. The simulations range from sprawling war games in the desert, with soldiers shooting laser beams instead of bullets, to one called Full Spectrum Warrior, in which players lead troops in realistic skirmishes.