While virtual reality (VR) and augmented reality (AR) have long captivated public interest as futuristic sci-fi brought to life, many people see little place for them in serious enterprise settings. Reading about VR might call to mind humorous videos of people running into walls while playing video games or amusing stock photos of executives wearing unwieldy headsets at meetings.
In reality, extended reality (XR), the digital combination of real and computer-generated environments, including AR and VR, is quickly revealing itself to be an indispensable tool for enterprises across multiple industries. Over half the businesses surveyed for an Astute Analytica report are already using XR or have plans to do so, and a whopping 84% believe that XR will play an even more significant role in their businesses over the next five years. An average across several sources puts the estimated compound annual growth rate (CAGR) of the XR industry at 39%, representing an estimated market size of $465 billion in 2030.
These figures are based on averages of current market size and CAGR estimates of $18.9 billion at 39.20%, $27.6 billion at 41.10%, $21.4 billion at 35%, and $14.8 billion at 40.70%.
In the software space, companies competing to build the "application layer" on top of XR infrastructure are driving XR applications. Microsoft, for example, is currently building and improving upon several enterprise solutions across the Microsoft cloud, such as Dynamics 365 Connected Spaces, Microsoft Mesh, and Azure Digital Twins. On the hardware side, there are around 10 major XR devices in the market today, with prices ranging from about $300 to $3,000, and up to 10 more major device launches are expected in the next one to two years.
XR solutions promise to play a key role in enterprise success moving forward. The following examples serve as a great way for enterprise leaders to begin thinking about how XR could transform the way they do business.
1. Training and Onboarding
Training and onboarding employees is an expensive, time-consuming, and crucially important task for every enterprise. The implementation of immersive XR training experiences has the potential to revolutionize the onboarding process for many firms, offering employees the unique opportunity to practice new skills in a safe and controlled yet realistic environment. Experts can also connect with trainees across many locations simultaneously, giving firms a boost in the competitive world of global talent development.
XR training can be especially useful for companies in industries such as manufacturing, construction, and healthcare, where hands-on training is necessary but may be too costly or dangerous to carry out in the real world. For example, the U.S. Army awarded Microsoft a contract for 120,000 HoloLens AR Headsets at an estimated $21.88 billion over 10 years. Lockheed Martin has already found dramatic success with the HoloLens 1, reporting an astounding 85% reduction in training time.
2. Customer Service and Sales
As consumers begin to expect more personalized and comprehensive customer experiences, XR has stepped up as an unparalleled way to showcase products. Shoppers can visit virtual stores, interact with digital representations of products whose physical counterparts lie halfway across the world, and even "try on" clothes—a marked improvement over scrolling through static images on a webpage. This can not only improve customer satisfaction, but also increase sales and reduce the number of returns.
Appliance company Dyson offers a virtual store in which users can test its products before buying them; a slew of U.S. furniture retailers—including Crate & Barrel, Walmart, West Elm, and Wayfair—provide buyers the ability to place furniture in virtual representations of their living rooms to aid in their purchasing decision.
In a business-to-business setting, Shopify Inc. uses AR to guide its merchants through the ordering process, looking at product images in real-time to ensure that merchants receive accurate information about product features. Other firms like NH Investment & Securities are offering virtual investment advisory services.
3. Remote Collaboration
XR can be used to facilitate remote collaboration, allowing teams to work together in a virtual environment as if they were in the same physical location. This can be especially useful for companies with distributed teams or those operating in industries where face-to-face meetings are not possible. Minimizing the need for travel also saves time and money and has the added benefit of greatly reducing an enterprise's carbon footprint.
XR also promises to go far beyond the standard video conference call in recreating the sensation of face-to-face interaction, promoting more engaging, energizing, and interesting meetings. In the realm of education, the University of California at San Diego's Rady School of Management has created a virtual campus boasting real-time lectures, breakout spaces, and outdoor areas.
4. Design and Development
The design and development of both products and processes is already being revolutionized by XR. Detailed and interactive 3D renderings of products allow for designs to be iterated without the need for expensive physical prototypes and a collocated product team. Digital prototypes are also far easier to reuse, combine, and store.
In the area of process design, companies are making use of "digital twins," which are recreations of physical structures that can be interacted with in a virtual environment. BMW, for example, utilizes digital twins of its production lines to quickly and effectively identify areas for process improvement. Future advancements promise details down to "screw level," paving the way for unprecedented gains in efficiency.
Challenges With Enterprise Utilization of XR
While XR technology has the potential to revolutionize the way companies do business, there are several challenges that companies may face as they work to realize its potential. In the constantly changing landscape of XR, it can be expensive to implement and difficult to predict the ROI.
Additionally, a lack of longstanding business models and practices means companies will have to experiment and learn as they go. Finally, there may be a learning curve for employees as they adapt to using XR technology, and enterprises may suffer from a lack of managerial capability to embed metaverse technology into existing businesses.
Taking Action in the Enterprise XR Space
The wide variety of compelling examples and use cases as well as the growing market size and adoption rates of XR mandate that all enterprises take a close look at the ways their operations can be transformed with these new technologies. Although the field can potentially seem overwhelming, it represents a wealth of opportunity and could very well usher in a new way of doing business in the modern world.
Credera can help you explore the possibilities that XR technology presents for your business. We bring the depth of expertise in structured innovation, program and change leadership, and emerging technologies required to make the implementation possible and profitable.
If you'd like to learn more, contact us at email@example.com.