The Burgeoning Commercial VR Opportunity
Consumer uptake of virtual reality might be taking longer than some pundits expected, but the technology is finding robust traction on the commercial side of things. In fact, IDC recently published a Worldwide AR/VR Spending Guide report that predicts commercial spending on hardware, software, and services related to virtual reality will surpass consumer spending on the technology this year. What makes this particularly interesting is that this commercial growth is taking off despite the dearth of commercial-focused hardware in the market.
Strong Uptake Across Numerous Verticals
May of the challenges faces VR in the consumer market, such as the high cost of hardware, the complexity of setup, and the lack of mainstream content, aren’t major issues when it comes to commercial deployments of the technology. And across many different verticals and use cases, the benefits are obvious, and the potential return on investment is clear. IDC’s research on the topic to date has explored VR in 12 different industries and across 26 different use cases. And remember: it is still early days.
Some of the most compelling industry use cases include:
- Retail: Perhaps the most-cited use case for VR is in high-end automobile showrooms, where potential buyers can view a much wider range of car interiors and options in VR than any dealer could ever stock on the lot. In the future, you can imagine moving beyond simply kicking the tires to being able to drive the car on a virtual track. Retail use cases will expand across all types of products, and may well become one of the ways traditional brick and mortar retailers find to compete with online stores.
Education/Knowledge Transfer: From training firefighter to soldiers to educating engineers and school kids, VR is going to drive dramatic shifts in how people learn in the future. In the first scenario, people receive training in situations too dangerous and expensive to simulate in the real world. In the second, students gain access to brand new ways of interacting and absorbing information that is less passive and more active.
Manufacturing: VR is already taking off in both process and discrete manufacturing. The use cases are as varied as the collaborative, iterative process of creating products, to the training of engineers and others on how to run massive and complex manufacturing lines. The potential for VR disrupt age-old manufacturing processes—especially when combined with 3D printing—is massive.
- Healthcare: VR will impact both the practitioners of medical care and those receiving it. On the practicing side, VR will help new doctors learn, and existing doctors see issues in new ways, pre-visualize complex procedures, and gather second opinions from remote colleagues. For patients, VR will offer the ability to better understand what’s going on in their bodies, as well as a wide range of treatment options for mental health issues.
- Construction: VR is already in use in major construction projects around the world. From initial designs to construction, project pitches to project management, VR is enabling companies to make better buildings and to do it faster. And by pre-visualizing the exterior and interior of a building, the construction company can cut down on costly mistakes, while also allowing the building’s owner to make tweaks during construction, and not after. Eliminating skylights, changing finishes, and moving doors are much less costly if such changes are made before installation and not after.
Growth Despite Key Challenges
IDC has forecast robust growth in all the above areas, as well as a long list of others. And this growth is occurring even though a great deal of the early work here is happening on the consumer-grade hardware that’s available in the market today. Suffice to say, products designed for use by consumers aren’t rugged enough for long-term deployments in commercial settings. This lack of commercial-focused VR hardware is a clear market need the industry has failed to address so far.
Later this year I expect the launch of standalone VR products—based on reference designs from Intel and Qualcomm—to gain more traction in commercial than in consumer. While most consumers have limited need of a VR-only device, companies looking to deploy VR will find the simplicity quite appealing, especially after vendors start building robust, commercial-grade versions.
As the number of hardware options increase and more commercial-centric designs hit the market, the software and services associated with the technology will improve, too. We should also start to see the emergence of more VR standards, which will be key for long-term growth. And in the span of a few short years VR will be quite well entrenched in many of these vertical markets. This represents a large opportunity for the technology companies that service these markets, and an outsized threat to those industry verticals that fail to embrace the technology in a timely manner.