As Consumer Virtual Reality Lags, Commercial Interest Grows

The Virtual Reality headset market has taken its fair share of lumps in the last 18 months, as the industry has struggled to find the right combination of hardware, software, and pricing to drive consumer demand. But while consumers are proving a hard sell, many in the industry have found an increasing number of companies willing and eager to try out virtual reality for a growing list of commercial use case. A recent IDC survey helps shed some light on this important trend.

Early Testing, and Key Verticals
IDC surveyed 500 U.S. IT Decision Makers between December 18, 2017, and January 19, 2018. One of the key takeaways from the survey: about 58% of IT buyers said their company was actively testing VR for use in the workplace. That number breaks down like this: More than 30% said they were in early testing stages with VR. Almost 18% said they were in the pilot stage. Close to 7% said they were in pilot stages of deployment. And about 3% said they had moved into late-stage deployment of the technology.

Early testing represents the lion’s share of that figure, and obviously, that means different things to different people. In some companies that means a full-fledged testing scenario with different types of hardware, software, and services. For another, it may well mean somebody in IT bought an HTC Vive and is playing with it. But the fact that so many companies are early testing is important to this nascent industry. That also means more than one-quarter of respondents said they were in a pilot stage or later with VR inside their company.

I have written at length in a previous column about the various industries where we see VR playing a role. In this survey, respondents from the following verticals had the highest response rates around VR: Education/Government, Transportation/Utilities/Construction/Resource, and Manufacturing. When we asked respondents who in their company was driving the move to embrace VR, IT managers were the most prominent (nearly 32%) followed by executives (28%) and line of business (nearly 17%).

Key Use Cases, and a Demand for Commercial Grade
Understanding how companies expect to use VR is another key element of the industry moving to support this trend. We asked respondents about their current primary use cases for VR, and the top three included product design, customer service, and employee training. The most interesting of those three to me is employee training. We’ve long expected VR to drive training opportunities related to the high-risk job and those related to high-dollar equipment. Think training firefighters and doctors, as well as people who utilize million-dollar machines. But VR is quickly moving beyond these types of training to include a much broader subset of employees. VR can speed knowledge transfer for everyone from retail salespersons to auto body repair specialists to new teachers. Many companies quickly realize that VR not only speeds onboarding of new employees but can be a big cost saver as well as you cut down on training-related travel and other expenses.

One of the key challenges for commercial VR rollouts to date is the simple fact that almost all of the hardware available today is distinctly consumer grade. I wrote early this year about HTC’s move to offer a more commercial-friendly product with the Vive Pro, which includes higher resolution, better ergonomics, and a will soon offer a wireless accessory to cut the tether. Beyond these types of updates, however, one of the things that commercial buyers want from their hardware is something that’s more robust, that can stand up to rough usage that would occur in a workplace. So when we asked respondents if they would be willing to pay more for commercial-grade hardware, a whopping 80% said yes, they would.

Biggest VR Roadblocks
While the survey data points to an interest in VR among many companies, clear use cases, and a willingness to pay, bringing the technology into the workplace will still face numerous roadblocks. When we asked respondents about the biggest roadblocks to VR adoption within their company, the top answers included a lack of clear use case, hardware cost, software cost, and services cost. So while many companies can see the obvious use cases for VR, many IT decision makers are clearly having some difficulty articulating these use cases within their company. Also, while many express a strong interest in paying more for commercial-grade hardware, the cost of hardware, software, and services is still a major blocker within many companies.

It’s early days for VR in commercial, and many of these roadblocks will disappear as the technology improves, use cases crystalize, pricing comes down, and the clear return on investment when using VR comes into view. In the meantime, the industry needs to move to embrace the growing demand for commercial VR, making it easier for companies ready to take the next step.