In the past 20 years, we have witnessed a rapid evolution of computing technology and the rise of video games that are now utilizing virtual reality (VR) and augmented reality (AR). Using biological circuits and silicon sensors, today’s lightweight, unobtrusive head-mounted-devices (HMDs) trick the human brain into interpreting an imaginary world as real.

Unlike PCs, which were first used to fulfill demand from large enterprises, small and immersive VR and AR headsets are expected to appeal equally to consumers and enterprises. Goldman Sachs recently predicted that the VR and AR hardware market will touch $80 billion by 2025. Citibank expects the market for VR hardware, networks, software and content to reach $200 billion by 2020. What is the better solution that will have the greatest impact on an enterprise?

VR versus AR in the Enterprise

VR eliminates the need for a person to be physically present in environments that depend heavily on “hands-on” expertise, such as healthcare, manufacturing, and utilities. For example, a 3-D rendering of patient images, product designs and factory layouts allows people and facilities to be seen, remotely monitored and deal in real time. Nevertheless, VR can be limiting in that it completely blocks a person’s immediate surroundings – requiring them to remain in place and, in some people, induces nausea.

AR headsets have an advantage because they merge a person’s present surroundings with 3-D images to create a continuous view of both the virtual and real worlds. Users can move around and remain productive. AR is expected to focus primarily on the enterprise, while VR will emerge as a consumer play.

The Age of the Headset

HMD headsets have the potential to ease process bottlenecks and save time and money by reducing the need for physical premises and presence. They could be used for employee training and engagement programs, enabling a better understanding of employee and consumer behavior. Much like the iPhone removed the need for physical buttons, HMDs could create virtual buttons for any application incorporated into it. Imagine traveling to a foreign country where sign boards and food menus could be translated in real time, hands-free.


Industries Where VR & AR Will Have the Greatest Impact

  • Branding & Marketing – Marketing messages delivered through a VR or AR headset are more effective, richer, highly personalized and devoid of any distractions.
  • head-mounted-devicesManufacturing – Sensors installed on factory floors and on machines create opportunities to monetize software and data, improve operational efficiencies and revamp supply chains.
  • Healthcare – VR and AR 3-D operating room simulations will decentralized mental health treatments and upend evidence-based medicine and the way care is delivered.
  • Retail – VR and AR headsets can be a tool for squeezing the most value out of the data gathered from social media and mobile apps and to tailor shopping experiences to suit different customer segments.
  • Entertainment – By 2025, Goldman Sachs expects the biggest chunk of software revenue to come from video games, live events and video entertainment in the form VR and AR interaction(see Figure 3). Imagine stories being told in a 360-degree format that allows viewers to watch the plot unfold from any angle they choose.
  • Education – VR and AR could revolutionize education through immersive learning in primary and higher education. Students can take guided tours of anything with engaging 3-D graphics and 360-degree videos.

Hurdles to Widespread Adoption

If the disruptive power of VR and AR HMDs matches that of the PC and the smartphone, we need to cover the associated challenges. 

  1. Price and apps: Prices currently range from $599-$799, but the headsets must be tethered to computers capable of running high-end VR software, which adds to the cost. Cheaper HMDs that use smartphone displays are currently limited by the poor battery life of most smartphones and the low quality of displays. 
  2. User experience: Although VR headsets have become more user-friendly, headset manufacturers are still competing to make people feel more comfortable with these devices. VR and AR headsets will have to deal with the fact that one size does not fit all.
  3. Standards: To enable widespread enterprise and consumer uptake, VR and AR will need similar universal standards that allow developers to make applications that are open and inter-operable across different headsets. 
  4. Display and Processing: Hurdles involving display technology, real-time processing and calibration of physical environments must also be overcome.

Transforming Enterprise Reality

For enterprises looking to incorporate AR and VR into their processes, those that have taken concrete steps to digitize, such as rewiring the enterprise around the SMAC stack, are primed to make quick and long-lasting gains, since these technologies are building blocks for AR and VR. Companies will need to ensure a reasonably smooth transition by thinking through how and where to integrate their existing technologies with AR and VR, and properly train and re-skill employees to benefit from them.

To recap, begin by creating the necessary infrastructure and a supportive ecosystem. Next, choose AR, VR or both. Effectively manage this change within your organization and be sure to address data privacy and security.

Tell us about your plans for implementing AR or VR in your organization. For more information on this topic, please click here.

Akhil Tandulwadikar

Akhil Tandulwadikar

I am a Senior Research Associate with Cognizant Research Center. I create fact-based thought leadership assets such as research papers and infographics... Read more