AR/VR in the Enterprise: All Smoke and Mirrors?
AR/VR: Promises vs. Reality: Despite the initial hype around AR/VR technologies, many believe they have yet to meet their expected impact, raising questions about their true potential in business.
Tried-and-True Use Cases: Yugal Joshi highlights practical applications like employee training and remote support, which demonstrate AR/VR's value in enterprise settings through cost-effective solutions.
Consumer Tech: A Mixed Bag: AR/VR headset shipments saw a decline in early 2024, but a significant predicted growth suggests a complex consumer landscape that still holds promise.
Workplace Wonders or Tech Mirage?: While AR/VR can enhance business operations, the vision of widespread adoption in offices remains uncertain, challenging the notion of its seamless integration into daily tasks.
Growth Ahead (with Caution): Forecasts suggest strong growth for AR/VR technologies from 2024-2028, yet skepticism about their full potential continues to temper excitement among businesses and consumers alike.
We were promised a metaverse; all we got was this lousy headset.
That’s not much of a t-shirt slogan, much less an endorsement of the state of virtual and augmented reality (VR/AR). Still, it might capture the general sentiment about AR/VR today – especially when considering potential business uses for the technology.
“There is a general feeling that AR/VR has not made the intended impact compared to its potential,” says Yugal Joshi, partner at the technology research firm Everest Group, where he leads the firm’s cloud and digital services research, as well as advising clients on emerging technology adoption.
In this article, I’ll do my best to cut through the noise and get a clearer sense of the opportunities and challenges so you can make a more informed decision.
Where Things Stand Today
To be clear, Joshi – like many other people in the tech industry – believes there absolutely are use cases for AR/VR in the enterprise. Joshi notes some “tried and true” examples like employee training, advanced design and prototyping, remote support, collaboration, and customer experience personalization.
“These have been tried and adopted across a variety of enterprises,” Joshi shares, adding that cost reductions have been a standard business justification. An industrial firm can train staff on heavy machinery without having to invest in or risk expensive industrial assets, for example.
In the consumer world, meanwhile. AR/VR headsets and other technologies are a growing concern. While headset shipments actually declined in the first half of 2024, research firm IDC reported a 12.8% increase in Q3. The company predicts a 43.9% compound annual growth rate in headset shipments from 2024-2028.
So we’re all forgiven for believing the initial hype: AR/VR at least seems like useful tech in business environments and a potentially profitable one at that. Yet the image of an office full of people zooming purposefully around in AR/VR headsets seems far-fetched, to put it gently.
What’s the real story? Is AR/VR in the enterprise fact or fiction? Like many worthwhile questions, the answer isn’t straightforward.
Whereas some hot and emergent tech – AI, anyone? – arrives with potential impacts and use cases for virtually any business, AR/VR’s viability depends significantly on the specific needs and goals of your organization.
AR/VR for Business: 4 Big Challenges
Again, some of the hype around AR/VR is justified. If a retailer can elegantly enable customers to “try on” clothing or accessories via an immersive digital experience – without setting foot in an actual store or dressing room – that could be a boon for sales (and reducing online returns). Similar experiences abound: what if you “test-drove” your next car from your couch?
For some companies, significant investments in AR/VR tech may not make any sense – there’s not enough of a business case to justify the costs and maintenance.
Regardless, some headwinds are blowing currently that may chill short-term adoption in business environments. In no particular order:
- Return-to-office (RTO) mandates: There has been a major shift toward remote and hybrid office models over the past five or so years. Now, there appears to be a potent push – at least among some employers – for people to return to the physical office. That cycle is a potential problem for AR/VR adoption in the enterprise.
“Many companies have accelerated their return to work initiatives,” Joshi says. “Given hybrid work was an important drive for AR/VR, there is a potential challenge toward its adoption in this use case.”
- Competing technology priorities: Here’s another reality that will push AR/VR down some strategic IT priority lists: AR/VR isn’t the hot new tech anymore, and it’s getting squeezed out by bigger stars, including the biggest of them all at the moment.
“AI adoption has crowded other initiatives in enterprises, and AR/VR is one of those,” remarks Joshi. “Therefore, the technology must wrestle hard to get leadership attention.”
According to Joshi, that's compounded by stagnation in the visible enterprise use cases. The ones we covered above are roughly the same as the ones people were talking about when AR/VR first arrived on the scene.
"AI-first vendors are pushing the envelope of innovation and bringing newer use cases, whereas the AR/VR industry is stuck where it was many years ago,” declares Joshi.
- Costs may nullify cost savings: Business and technology leaders need business reasons to justify new tech investments. This could be a significant driver in enterprise AR/VR adoption, but only if the costs eventually come down.
“Most companies want to trim their R&D costs given the macro situation. AR/VR could be a strong lever to achieve this objective,” Joshi comments. “However, given the large upfront investments, it becomes hard to justify the business case.”
Apple’s Vision Pro headset starts at $3,499, for example. How eager are you to outfit your whole team with one?
- The usual enterprise suspects: The story of AR/VR to this point is largely a consumer narrative. The reality is that the biggest opportunities at the moment are in consumer spaces: gaming (duh) and other forms of entertainment, retail, and so forth.
This begs the question: do you really want one of your team members using your corporate apps or accessing your data with a consumer entertainment device?
“Issues around interoperability, security, and privacy of data collected are getting more attention from enterprises,” observes Joshi. Other familiar forms of user resistance also apply: bulky devices, cultural resistance, connectivity, and other performance issues.
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On the Horizon: New Business Cases for AR/VR
So is AR/VR the holiday gift that no one really wanted, or the real deal?
It’s still nascent tech, and there are certainly macro trends globally that could drive greater adoption – such as continued improvements in mobile and fixed-line internet connections globally. If 10Gb connections became ubiquitous, for example, that would almost certainly spawn new generations of digital experiences.)
As the tech improves overall, the potential uses should, too. In the near term, here are three ideas about what could move AR/VR up enterprise IT priority lists.
- Consumers demand it en masse. If AR/VR hit some tipping point with consumers – not just, say, serious gamers, but virtually anyone – then some industries and businesses would probably need to pay attention. Virtually any consumer business – apparel, travel, entertainment, automotive, e-commerce – would have a greater interest in offering immersive customer experiences if those customers were spending significantly more time on AR/VR devices at some point.
- Vendors develop enterprise-grade solutions. “Enterprise-grade solution” is the bane on any self-respecting tech writer, but that’s kind of the point: enterprise vendors know they need to invest seriously in the un-sexy features serious businesses require, all the more so if they hope to sell into highly regulated industries such as healthcare or financial services. Hardware and software that prioritizes security, governance, interoperability, and other requirements will be key to increased adoption.
“Many vendors are coming with their APIs, SDKs, and interoperable platforms that can alleviate some of these concerns, but these are yet to be broadly adopted,” Joshi claims.
- The tech gets better. Last but not least, there’s ample room for improvement in the tech, starting with the hardware.
“I expect a lot of development in ‘headless’ AR/VR systems,” Joshi posits. “These need to get embedded in the day-to-day workings of enterprises rather than needing to always wear headsets."
He points to examples like recent innovations in smart glasses as promising signs.
“These can accelerate AR/VR adoption in enterprises,” according to Joshi. “In addition, embedding [AR/VR experiences] in browser-based access – [such as] smart car showrooms – can also help adoption.”
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