VR Finds a Growth Path in Enterprise, but Not without Obstacles

After a few years of testing the waters in the consumer space, Virtual Reality (VR) is right alongside Augmented Reality (AR) in many enterprise conversations centered around visualization and digitization. VR has been cast in a consumer-only light for quite some time, with a comfortable but still-limited market in media and entertainment, specifically gaming. Today, with AR’s impressive Return on Investment (ROI) display, enterprises are exploring VR as an alternative to AR or an additive device in their grander digitization plans.

HTC’s newest device, the HTC Vive Pro Eye, is an iteration of its existing Pro platform with the addition of eye tracking and an eye-watering starting price of US$1,600. BMW is working with ZeroLight and HTC for VR buyer experiences, joining other brands like Audi that have been in the VR game for longer. Business-to-Business-to-Consumer (B2B2C) enterprise entertainment continues to grow as well, with Las Vegas hotels including The Linq, MGM Grand, and The Venetian all investing in VR experiences (Survios, ZeroLatency, and The Void, respectively). There’s continued social platform VR interest as well, which fits a Business-to-Consumer (B2C) outlook; while Oculus and Facebook still push to enable VR social applications, new operators are finding space in the market. Against Gravity, the company behind social VR platform Rec Room, recently raised US$24 million in a Series B funding round.

These efforts join ongoing conversations about other worker-oriented enterprise VR use cases, especially training, that have been in place for years. Walmart and STRIVR are two names to watch in this space, with the list growing steadily as data around ROI becomes more readily available.

Virtual Reality fits neatly in the AR/VR spectrum for enterprise, fulfilling use case needs for high immersion and visualization capabilities that Augmented or Mixed Reality (MR) cannot; AR/MR inherently sacrifices visual fidelity for the sake of see-through display capability. Training with 360° video and/or virtual environments has proven popular, allowing workers to train off-site and with more flexibility in schedule and content. Digital training of any sort is incredibly powerful thanks to the infinitely adjustable parameters for created situations, environments, and workflows. Having control of every important paradigm isn’t possible in reality, and companies go to great expense to control as many variables as possible.

The pricing concern around the HTC Vive Pro Eye and similar devices is far from uncommon with enterprise VR; there are dedicated enterprise branches for both HTC and Oculus that offer professional services and extended warranties. HTC has made it very clear that the Vive Pro is an enterprise-targeted device, but no matter the device, ROI is king. Some enterprise implementations can get around very high starting prices for devices like the Vive Pro, making it up quickly in savings related to training, collaboration, efficiency, etc. However, that high Capital Expenditure (CapEx) puts greater pressure on the implementation to reach an acceptable level of ROI, which can require a greater amount of work than just signing a purchase order: think of connectivity requirements, security considerations, content development and deployment, and even just user churn (a device collecting dust is not generating any ROI, no matter its potential). Standalone VR devices are a promising pathway here, with “good enough” performance for many use cases while providing a better setup and user experience at a lower cost—sometimes significantly lower, when comparing high-end Vive Pro-level devices paired with a powerful PC to something like an Oculus Go. Again, use case dictates requirements, but for many a standalone device can alleviate some setup and cost concerns.

There are similarities to the more mature enterprise AR market for VR. For a company looking to save on travel and training costs/time, and increase user efficiency/accuracy, the first step is gaining knowledge and understanding of the technology and its capabilities. Next comes extrapolating that knowledge to identify the most valuable use cases and the requirements to enable them and lastly, actual implementation and usage. Generally, augmented reality is stretching into the third stage and VR is catching up, especially on the use case identification side.

These devices are different enough, despite some shared space in content creation/distribution and usage methods, to warrant both individual and combined conversations. In the case of overall digitization topics, both AR and VR should be considered; for more nuanced and focused discussion, there are naturally areas in which either AR or VR is more suitable. In use cases where immersion and interaction are paramount, VR is the ideal choice; where spatial awareness and information parsing are, AR is. There’s no one size fits all device on the market yet. Instead, existing device types are being utilized in the ways that make most sense. There’s less discussion today about that confluence of AR and VR technology, although there are still exciting examples of switchable displays and the ideal device that can seamlessly go between best in class AR and best in class VR. Instead, use cases are first identified by the potential ROI for these devices, and then variables impacting usefulness and value ultimately dictate which device types are best suited for the job. The nature of VR device usage means it is not suited for dangerous or high-mobility environments, for example.  

With many considerations, it’s no surprise that total market size for both AR and VR is expected to be significant, but the exact time for that growth to really begin is more nebulous. There are many positive indicators in the market today, with a greater selection of devices and a wider breadth of content options (both for creation and for consumption) appealing to a wider audience. The AR market has seen a rapid increase in scaling up operations, mostly on the back of ever-increasing positive Key Performance Indicator (KPI) data. This same rate of data availability will hit enterprise VR soon as well, making the two markets more similar than different, especially when fit into the broader ongoing enterprise digitization movement.