There are no elves or orcs, but IBM's new online world for business meetings could prove as exciting as a virtual fantasy realm for recession-hit companies looking to cut travel costs while promoting collaboration.

Big Blue's new Virtual Collaboration for Lotus Sametime service, launched last week at the Enterprise 2.0 conference in Boston, offers a host of tools that allow employees and business partners to interact in 3D spaces without leaving their desks.

Users can select colleagues from their Lotus Sametime contact list and invite them, in avatar form, into the online world, where there's boardrooms, auditoriums, and collaboration spaces. The space supports a number of online chat, voice, and presentation tools to facilitate full communication. IBM worked with VoIP specialist Vivox on the voice component.

Citing independent research, IBM claims business interest in virtual worlds is growing. A recent survey by analysts at research firm ThinkBalm found that more than half the respondents expected to derive economic benefit from so-called immersive technologies this year.

More than half said such technologies are less expensive than face-to-face meetings that often involve travel costs such as hotels and air fare, and are more cost effective than Web conferencing.

One institution that's testing Virtual Collaboration for Lotus Sametime is Northcentral Technical College in Wisconsin. The college holds online courses in IBM's 3D environment, which CIO Chet Strebe said is more appropriate for business and educational use than consumer focused online worlds like Second Life.

"Although we can already conduct class through other worlds, there is little classroom control or security," said Strebe. "With IBM's new virtual meeting service, teachers would be able to tell which students are present and better control the environment," said Strebe. Others trialing the service include Manpower, Raytheon, and Northeastern University.

IBM is also testing its virtual world internally. More than 2,500 IBM employees have been using it since February. "Virtual Collaboration for Lotus Sametime is part of IBM's ongoing work to redefine the nature of online meetings," said John Allessio, IBM's VP for Lotus software services.