On the Verge of Reality

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The next technology wave for business may be virtual reality.

By Joanie Wexler

There were times when naysayers believed there was no use for PCs or smartphones in business.

It wasn’t too long ago those same beliefs were spoken about virtual reality.

But now, the time is ripe for virtual reality (and its tech cousin, augmented reality). This is due to a collision in the marketplace: Technology improvements intersecting with lower price tags.

Adding to it is the fact that virtual reality components are being integrated into everyday smartphones.  

After more than 20 years of false starts with virtual technologies, businesses are finally embracing them. This includes Converse, IKEA, Marriott, the NFL, the University of Louisville, and Volvo.


Better Technology, Better Price
Today, entities other than the ultra-deep-pocketed now have a chance to experiment and benefit from these technologies.

So much so that Digi-Capital estimates that the virtual/augmented reality market will hit $120 billion by 2020.

Eric Abbruzzese, a virtual reality follower and research analyst with ABI Research, predicts “meaningful price drops in 2017 and 2018 such that middle sized companies can use” the immersive technologies.

Meanwhile, a current rash of high-quality consumer systems could impact virtual reality’s uptake in business.

Facebook’s $600 Oculus Rift virtual reality system, for example, shipped in March for gamers and social applications. The $800 HTC Vive became available in early April. And the $400 Sony PlayStation virtual reality system is slated to ship in October.

Widespread acceptance, however, will hinge largely on the quality of the experiences, according to Abbruzzese. The current flood of product deliveries “is going to prove or disprove the validity of the market as a whole,” based on how realistic they are, he asserts.


Low-Risk Training
The Arizona Cardinals, Dallas Cowboys, Minnesota Vikings, and New York Jets use immersive reality training to gain additional practice time without worrying about torn ACLs or concussions.

In 2015, Sports Illustrated named virtual reality “innovation of the year” in part for these life-like training applications.

Virtual technologies are well suited to situations where people need to hone their skills without risking life and limb.

Imagine maneuvering in life-threatening military situations. Or operating an oil rig in a tumultuous sea. Even learning to perfect a tricky surgical operation.

Despite its current progress, the immersive, interactive simulated reality market still has kinks to iron out.

The initial investment for virtual reality training will be the largest expense. But once you have the core components, you can reuse them. This means that the follow up costs little to none.
 

Putting a Price Tag on Virtual Reality

Business-to-consumer apps that work with low-cost, commodity elements are relatively easy to price out. But it’s challenging to get a very specific understanding of just what an internal deployment might cost because of the variable prices in systems and components.

One analyst puts a stake in the ground with an approximate cost of outfitting 15 employees on an oil rig with virtual reality (VR):

  • User device (head-mounted display or other): $1500 per employee:
    $22,500 (one-time cost)
     
  • VR software: Ranges from about $200 per month ($2400 per year) total for Android to $4000 per device (one-time outlay) for high-end controller software: Up to $60,000 (one time)

  • Maintenance: $50 to $100 per device per month:
    Up to $18,000 per year
     
     
    First year total cost: $105,000 for 15 employees
    Second year total cost: $78,000 for 15 employees

Source: Eric Abbruzzese, Research Analyst, ABI Research

 

“It may be expensive to make the first version of the [virtual reality] lesson, but once you have it completed, the next billion are free—a simple copy and paste of situational learning,” observes Jeremy Bailenson, founding director of Stanford University’s Virtual Human Interaction Lab and a professor in the school’s Department of Communications.

For example, creating sophisticated virtual experiences still requires a variety of components, which “aren’t yet turnkey, meaning it takes some expertise to manage the hardware and software,” says Bailenson.

Then there’s the unfashionable headset. There is sweating that the weight of it can cause. And some users report nausea and dizziness during a virtual reality the experience.


Kicking the Virtual Tires
There are many applications that businesses are using today. Let’s take a look at some of them:

  • Construction and Design Efficiencies: Virtual reality software-maker WorldViz estimates that builders save about 90 percent of the costs involved in making real physical models if they use a virtual technology. By using virtual reality, anyone can walk through a full-scale digital model to better understand layout and design features pre-construction. This holistic view allows for changes in the early stages of design, reducing time and resources spent on changes in the field or potential rework.
     
  • Manufacturing: Manufacturing plants and assembly lines use virtual reality to see the many different process flows virtually—before building and organizing the “real” one.
     
  • Logistics: Global logistics firm DHL conducted a pilot project to equip their warehouse staff with head-mounted augmented reality displays. Workers could easily view information about warehouse aisles, product location, and how many of each product to pick. The result? A 25 percent productivity improvement.
     
  • Operating Room: The technology is combining with telemedicine to enable remote surgeries. Surgeons operate on far-away patients using actual sensory data to recreate the operating environment. As they “operate,” they remotely control a local robotic device that physically performs the procedure.
     
  • Mental Health: Psychiatrists at the University of Louisville are using virtual reality in cognitive behavior therapy. It’s being used to treat patients with such phobias as flying, public speaking, and heights. They’re also using it to help relieve post-traumatic stress disorder (PTSD). The controlled environment allows doctors to safely expose their patients to simulations and counsel them through the experience to cope with their feelings.
     
  • Interior design: IKEA launched The IKEA Virtual Reality Experience in early April. This experience helps people design customized kitchens using an HTC Vive headset. Consumers can view multiple kitchen styles from different perspectives by shrinking or stretching themselves to the size of a child to a very tall adult. Wheelchair height is also an option. These perspectives help consumers customize cabinet heights and locations to meet their particular needs and preferences.
     
  • Clothing and gear: With the augmented reality Converse Sampler app, customers can select any shoe from Converse’s catalog and simply point their smartphone towards their foot to see how the shoe will look. Using a different approach, North Face has built in-store systems that let customers virtually experience hiking and rock climbing. The goal is to engage shoppers who will then purchase the company’s gear.
     
  • Cars: Volvo created its Volvo Reality app when it redesigned its XC70 SUV in 2014. Consumers could test drive the vehicle on a smartphone using a Google Cardboard head-mounted display. The Swedish carmaker sent free Google Cardboard headsets to those who downloaded the Volvo customer app when it redesigned the XC90 in 2014. The goal was to get prospective buyers virtually inside their new vehicle and stimulate interest.
     
  • Travel: Marriott rolled out its own virtual reality with large “teleporter” booths that transported viewers into virtual versions of London and Hawaii, including realistic heat and mist. The hope was to inspire testers to book trips to these locations (and stay at Marriott properties, of course).

No Holodeck in Sight, but…
And what we’re all probably waiting for is a real-life iteration of the virtual reality Holodeck in the Star Trek series. We might not be close to that yet, but there’s plenty to look forward to in the near term.