Between 2008 and 2015, augmented reality (AR) was a technology gimmick looking for a market. Leveraging devices like smartphones, tablets, and, starting in 2012, smart glasses, innovators struggled with technical limitations, hype, and weak use cases.
In mid-2015, the market began a time of recalibration. While the announcements about Apple’s ARKit and Google’s Android ARCore are splashy headlines, Tractica does not believe they will have significant impact in enterprise AR market adoption (explaining why is a blog post topic for another time) for some time. The most significant developments since 2015 in that regard have been the advancement of computer vision, the integration of artificial intelligence (AI), and solid thinking around how to leverage AR to produce meaningful end-user benefits.
Enterprise use cases are rapidly evolving. Today, we are on the cusp of sustainable market adoption of AR, particularly for enterprise use cases. The key use cases that will drive enterprise market adoption are collaborative office tools, three-dimensional (3D) modeling for design, architecture, and animation, desktop replacement, retail, healthcare, education, plant maintenance, field service, and business-to-business (B2B) sales tools. Let us take a closer look at a few examples.
Collaborative Office Tool
Collaboration has become increasingly valued and, at the same time, increasingly challenging for today’s dispersed knowledge workers. AR headsets like the HoloLens can enhance productivity and, when connected to the cloud and web, could create virtual meeting places and communication platforms, enabling users to conduct business collaboratively, work in teams, and transact. One can envision AR headsets becoming standard tools in a meeting room of the future, with teams discussing a strategic plan of action, an architectural layout, or a product design, and rather than having a two-dimensional (2D) PowerPoint slide presentation, they can build a 3D holographic presentation for deeper understanding.
Three-Dimensional Modeling for Design, Architecture, and Animation
AR headsets have been demonstrated to be ideal devices for designing products or buildings. Whenever traditional computer-aided design (CAD) software was used on 2D screens to perform a task, smart glasses now allow users to see their design or object as a 3D hologram, providing opportunities to peer around different angles and corners, even inside the object, and treat it like a real object in front of you, rather than a mock-up on a screen.
A number of architectural and design firms have started using AR headsets like the HoloLens. Software developers Trimble and Autodesk are providing new extensions of their tools, enabling customers to work with 3D holographic representations of their models. Finger Food Studios has built a 25,000-square foot workshop to build large-scale holographic
applications, including one that helps design trucks. Rather than using clay models to make changes to a truck design, which traditionally takes 6 months, the HoloLens application cuts down the design process to 3 days.
The Microsoft HoloLens integration into Microsoft Windows 10 has an opportunity to become a critical part of computing going forward. Enterprise software (including Office and Azure cloud business) accounted for more than half of Microsoft’s $68 billion in revenue in 2014. Microsoft also controls 80% to 90% of the laptops, tablets, and PCs running the various flavors of Windows OS.
The workhorse computing platform within the enterprise is still the desktop or laptop computer. Offering Windows 10 as a free upgrade for Windows 7 PCs, laptops, and tablets provides a massive opportunity for HoloLens. In a matter of months, more than 50% of the world’s non-smartphone computing platforms could become HoloLens-capable. From an enterprise computing perspective, Microsoft has an opportunity to integrate all of its software, including Windows, Skype, Outlook, and Office, into the HoloLens. It is easy to imagine the HoloLens replacing many traditional desktop screens, with the HoloLens headset becoming the primary workplace computer.
While Microsoft could become the biggest AR software platform in the future, it will be a different story from a hardware perspective. Initial pricing for the HoloLens hardware is high and distribution is tightly controlled, so it may be a few years before we see HoloLens becoming a full desktop replacement.
Other companies are hoping to compete in this space, most notably Meta, which believes that it has a better solution, with a wider field of view (FOV) and a more immersive experience. Meta 2 is a tethered solution compared to Microsoft’s untethered all-in-one headset, but because it is tethered, it can offload some of the heavy optical processing to a PC.
Smart glasses that replace or complement the desktop likely face a long-haul journey. There are a number of technical issues to overcome, including FOV, weight, ergonomics and comfort, and extended AR use.
Business-to-Business Sales Tools
Many B2B sales professionals are challenged in that they must typically represent their products and services remotely; they visit their customers, not the other way around. For many products, visualization of where equipment might fit, or how a commercial interior build-out would look, could help B2B sales professionals do their job. According to recent Sales Management Association research, 40% of salespeople use tablets and 90% of sales organizations plan to invest more in tablets, which means most salespeople have the foundational tool needed to leverage AR B2B sales tools. The pioneers in this space have been Augment and VividWorks.
In April 2015, Augment introduced Augment for Salesforce, a downloadable app on the Salesforce Appexchange, which “allows you to visualize products at any time through a smartphone or tablet.” In April 2016, Augment announced the app was available on Oracle’s Cloud Marketplace.
VividWorks has a history of providing web-based 3D visualization tools, and has been focused on a B2B sales tool use case within the furniture industry. VividWorks offers the VividPlatform, a fully customizable web-based 3D visualization and sales management tool for product manufacturers and retailers. VividWorks’ Chief Operating Officer (COO) Jorma Palo told Tractica about how the company’s focus has evolved to AR. “We always saw a need for product visualization,” said Palo, “To extend the user interface layer, such as catalogs, for furniture sellers and furniture design companies. Giving a B2B sales person a tool where customers can see specific pieces in their intended spaces speeds up the sales cycle.” Palo also had thoughts about the impact of 3D camera phones on the B2B sales tool use case for AR: “Marker-based AR has worked well for us, because you can see a large object (furniture), from many angles, but when 3D camera phones/tablets are more prevalent, we will have much more accurate placement.”
The Questionable Promises of Mixed Reality
The momentum for smart AR glasses has shifted toward mixed reality (MR) headsets, which offer a much more compelling user experience, using 3D depth sensing and positional tracking to immerse the user into a holographic world. Microsoft HoloLens is the first truly capable MR headset and is seeing rapid momentum in terms of trials and pilots. There are still questions about whether or not Microsoft has oversold the capabilities of the device, and if the enterprise market can scale to make it a commercially viable product. Tractica expects that Microsoft is likely to be committed to the enterprise market at least through the end of 2018 before it readies the HoloLens for consumer launch. If the pilots do not convert into meaningful volumes, Microsoft could find itself in an awkward place like Google did with Glass, eventually pulling the plug.
Tractica sees a market for assisted reality, especially in industrial applications where glanceable interfaces are preferable to the full-screen MR experience. The bigger play for smart AR glasses with holographic capabilities will be as a desktop replacement or as a complementary device, extending frequently used applications like web conferencing, video, or even web browsing into the holographic space.
Smartphones/Tablets Are Practical, Viable Enterprise Augmented Reality Solutions
Despite the push for corporate smart glasses use, the vast majority of enterprise AR users over the next 5 years will use smartphones and tablets, not smart glasses. Smartphones/tablets are an affordable and reliable AR option, and the form factor works particularly well for several use cases, including plant maintenance, field service, B2B sales tools, and education. Tractica estimates that the monthly active users (MAUs) for smartphone/tablet enterprise AR will be 49 million by the end of 2022. In contrast, the installed base of enterprise smart glasses users at the end of 2022 will be approximately 19 to 21 million.