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Reality check - is virtual reality going to make it in the enterprise?

Cath Everett Profile picture for user catheverett May 31, 2016
Summary:
2016 has been billed as the “year of virtual reality”, but will such predictions come to pass? And what is the future likely to hold for the technology’s close cousins augmented and mixed reality too?

virtual reality
2016 has widely been billed as the “Year of Virtual Reality”. But despite being talked about a lot, the technology, which has been around in a form recognisable today since the late 1980s, has not, as yet, ever quite hit the mainstream.

So just how likely is that to happen now? Management consultancy Deloitte predicts in a recent report entitled “Virtual reality (VR): a billion dollar niche” that 2016 will, in fact, be the technology’s “first billion dollar year”.

Following the launch, and imminent or future arrival, of consumer headsets such as HTC Vive and Oculus Rift and mobile phone platforms such as Google’s Daydream for Android, it estimates that hardware sales will hit about $700 million, the equivalent of 2.5 million units, while the rest will be spent on content (approximately 10 million games). The report says:

VR is likely to have multiple applications, both consumer and enterprise, in the longer term, but in 2016 we expect the vast majority of commercial activity to focus on video games. We would expect the majority of spending on VR to be core rather than casual gamers.

But broader-based interest beyond the hard core will undoubtedly mount as the year goes on, Deloitte believes. As a result, by the end of 2016, the addressable market for games consoles will reach “at least 30 million units” worldwide and the high-end PCs on which they rely, around seven million units.

As for adoption of such technology in the enterprise, this will be somewhat slower. The report predicts:

We expect 2016 will be a year of experimentation, with a range of companies dabbling with using VR for sales and marketing purposes. These activities are likely to be commercially insignificant this year.

Given that virtual reality is about creating a computer-generated simulation of a 3D environment that people can interact with, the biggest area of focus initially is likely to be training. Existing use cases here include helping emergency response workers practice how best to respond to faults in nuclear reactors and offering flight simulation and land combat training for military personnel.

Ed Greig, disruptor at product design and development agency Deloitte Digital, explains the rationale:

“The key benefit is that virtual reality is completely immersive and much closer to hands-on learning than e-learning where people often get distracted and aren’t completely engaged. But with VR, they feel that the experience is really happening to them, and research shows that has much more impact on changing behaviour than simply showing someone a video. So training goals are more likely to be achieved, but it’s also much cheaper than onsite training.

Business applications

Downsides, conversely, include the fact that the technology is totally immersive. This means that it only works well for activities that users need to focus on 100% and that don’t require social or physical interaction.

But despite these challenges, training is not the only potential application for virtual reality. Another is the architectural visualisation of office environments, for example, in order to simulate how workers interact with the building and understand how it will look and feel when they are in it.

Other possibilities include creating parallel virtual worlds to assist in town planning or shopping precinct design, and even gauging how best to display stock within individual stores as part of wider market research activity.

Interestingly, however, a separate but complementary technology that could have a more pronounced impact on business is augmented reality (AR), believes Greig. Even though the most famous iteration of the technology, Google Glass, was killed by its owner in January 2015 due to lack of consumer interest, he believes that similar technology could make its mark in the enterprise space.

This is because AR, which superimposes computer-generated images such as video or text onto device screens, also enables users to interact with the physical world, opening up a wider range of possibilities.

For instance, people employed in manufacturing who need to keep their hands free in order to perform work tasks, could be provided with important information via suitable goggles or glasses. The same applies when offering remote support to engineers in the field when undertaking equipment maintenance and the like.

But Fiat Chrysler Automobiles has also been working with management consultancy Accenture to develop a prototype augmented reality-based mobile sales application.

The app, which is due to appear later this summer, enables consumers to interact with a virtual 3D version of the car they are thinking of buying. This means that they can walk around the vehicle and open its doors to look inside as if they were in a car showroom. As a result, Rachel Barton, managing director of Accenture’s advanced customer strategy, says:

Will technologies such as VR and AR have been adopted across all industries in a mass-produced kind of way over the next six months? No. But will we start to see them being used in real ways over that time to facilitate shopping and brand user experiences? The answer is most definitely yes.

Hidden potential

Futuristic smart glasses © dragonstock
But a key downside to this contention relates to the high levels of expertise required to produce AR applications. While such skills may not yet be in high demand, if the technology takes off, scarcities will also swiftly become apparent. Ian Hughes, analyst at 451 Research, explains:

Relatively speaking, VR applications aren’t that complicated to build if you use the developer kits and just change the camera. But AR apps are more complex because, to be believable, you have to understand the environment around them, which is about machine vision, spacial mapping and the like. So it’s much more complex.

Meanwhile, a third nascent but also potentially interesting phenomenon, which amounts to a blend between the two technologies, is “mixed reality”. And an interesting potential use case for business is the so-called “screenless office”, which is being developed by Florida start-up, Magic Leap.

Although it has yet to release a concrete product, the company has apparently developed a “mixed reality lightfield”, or kind of eyewear, that enables users to view realistic hologram-like images, which include computer screens. Deloitte Digital’s Greig explains:

It’s particularly useful for developers or traders who use multiple screens, but it could also save businesses money as it gets rid of a load of hardware requirements. People could potentially just have a phone or mobile device and then put on glasses in place of a desktop and screen. They also wouldn’t have to worry about confidentiality when working in public spaces because no one else could see what they’re working on. So screenless offices have the potential to be quite disruptive in a similar way that laptops were for the desktop market. It could be a technology that makes a big difference to the way people work.

But there is currently a big “if” there and, as Greig acknowledges, the technology is “a ‘depends’ one”.

Whatever the future holds for mixed reality though, the 451’s Hughes believes that both VR and AR are likely to have a much more important role to play than many observers might think. As he points out:

You could almost describe them as display technology for the Internet of Things (IoT). IoT is instrumenting the world, which is already in 3D so why squash it down into 2D displays? VR lets you immerse yourself more deeply so you can investigate possibilities in a virtual world, while AR lets you understand better what’s happening in the physical world. The IoT wave is starting to push us to a different way of looking at things, but the more you instrument and measure physical items, the more you need ways of displaying the huge amounts of information produced. So having a 3D front end makes sense.

My take

Conceiving of the widespread use of AR and VR as a front-end display technology to IoT is a novel idea. But even if it doesn’t quite happen like that, we are likely to see both technologies, but particularly AR, being employed increasingly frequently in everyday applications over the next couple of years.

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