Overview: Why the Industrial AR Market is Ready.
AR has turned a pivotal corner, and is at last positioned to be an indispensable tool for enterprise.
At Lance-AR, we’re directly connected to the AR hardware manufacturers, the AR solution providers developing the software to power that hardware, and we’re at the side of enterprise users from all industries who are turning to AR because it solves problems that no other technology previously could. Across all of that we're seeing clear indicators that the core components – from hardware, software, user interaction, ecosystem, and enterprise demand – have all evolved to the next level.
The enterprise AR industry has everything it needs right now... except for mass scaled deployments. But what we are seeing is a steady stream of small to medium production deployments, iterative expansions, and enterprise clients building AR into their core processes. In other words the AR market is performing like any new enterprise technology should in an emerging market. Hardware manufacturers dream of 10,000 unit orders, software providers dream of hands-off SaaS platforms, and users dream of cheap out of the box answers that immediately solve all of their problems. But that's a B2C model, at its best, and not at all what we would expect in enterprise B2B.
The current industrial AR market is actually right where it should be - with 2nd and 3rd iteration hardware now available that solves many early market problems. Software solution providers have obtained direct industry knowledge and expertise, and have redesigned their products to solve specific business problems. The enterprise users are bringing in their Operations and Training teams to ensure their AR investments actually get deployed. And now companies like Lance-AR are bringing the core strategies, methodologies, and implementation services that any enterprise solution requires for scaled production deployment.
At Lance-AR, we believe that if you haven’t deployed, then you haven’t really innovated. Read on to learn why we believe the market signals are clear, that the market is strong, and that the time for scaled deployment has arrived.
How Do We Define “Ready”?
First, what do we mean when we say the AR Market is ready?
We mean ready for production deployment at scale. AR is now delivering on the promise of changing the way we work. The need for pilots and POC’s has passed, and companies are now looking at how AR can solve specific operational problems, so it’s no longer a new technology in search of a problem.
Don’t underestimate the significance of this change. Enterprise AR user generated revenue will soon pass investor money as the financial driver of this industry, resulting in the natural selection of winners and losers in the hardware and software solution space. Innovation teams will move back to R&D, and make way for the AR project managers and AR integration companies to drive the buying decisions and use case deployment decisions. This financially-quantifiable feedback will drive innovation in the AR space, influencing the next generation of AR hardware and software to be more tightly aligned with the business problems they are solving. In turn, as this drives down costs and builds up the deployment and support resources at the AR solution companies, they will finally be able to afford and support AR solutions for the mid-cap and small-cap companies.
That’s what we mean by ready. And that’s where enterprise AR is headed in 2019.
Signals in AR Hardware: Smart Glass Maturity
Look where we are in May 2019 with new hardware announcements of Glass Enterprise Edition 2, Lenovo ThinkReality A6, Microsoft HoloLens 2, Vuzix M400, ThirdEye X2, Rokid, and more. We have a new generation of enterprise AR hardware coming to market – bringing with it lessons learned, copycats, and new entrants.
So what does all of this signal? A maturing market. Demand for hardware. Investment money that went into these companies is starting to pay off. We’re now in the 2nd or 3rd round of enterprise-focused AR smart glass hardware coming to market. And today there are not only lots of different use cases, there’s also a range of bespoke hardware suited to each. For instance, where RealWear excels in one use case, Vuzix excels at another, etc.
This signals that the enterprise AR market is “not one size fits all” – which is exactly as it should be. When we think about all the different disciplines using AR - whether manufacturing, medical, warehousing, etc - they each have different needs. A surgeon should be using a different set of tools than a butcher (at least we’d hope) so why, when it comes to technology like AR smart glasses, would they be expected to use the exact same device? It’s an important market signal that we now have all these different form factors, feature sets, and capabilities to satisfy the varied needs of each enterprise customer.
Signals in AR Hardware: Mobile-Based AR is a Driver for Enterprise Too
Let's talk about the non-smart glass AR devices – phones and tablets.
These are often overlooked when we’re talking about enterprise AR. But there’s something truly important taking place here: by bringing AR experiences to the masses, they're driving the expansion of the AR market overall. This trend is exemplified by the large number of Enterprise AR solution providers recently adding support for phones and tablets to their repertoire in addition to smart glasses, increasing their reach within a client’s pool of users while concurrently increasing license revenue.
Tablets and phones are ubiquitous in the hands of billions of people across the globe, so this channel to get AR into the hands, eyes and minds of people is extremely important and happening with great examples from IKEA, WayFair, and Amazon. While these devices are inferior compared to head-worn AR experiences due to cognitive dissonance, they’re serving a purpose of helping people to experience and comprehend what AR really is, and how it can better their lives. They also drive more of the data transformation, systems integration, and change management that needs to happen to deploy AR at scale regardless of the hardware platform. So it's absolutely driving the AR ecosystem forward.
Signals in AR Software
When we talk about the enterprise AR market being ready, again we are talking about deploying in production at scale.
This means that AR hardware that is wearable, deployable, and industrialized remains the deciding factor of what AR use cases are actually deploying today. Therefore the AR software solution providers that are most successful are providing effective software based on the capabilities of this deployable AR hardware.
As an example, RealWear through its 100 +/- solution partners have shipped over 15,000 units of their HMT-1 industrial AR smart glasses since 2018. These went to over 1300 individual clients, all used for remote or virtual assistance, digital work instructions, and human/IoT interfacing. This speaks to the power of where we are with AR software today – delivering robust solutions that leverage the unique features of a particular AR hardware device. This leads to a critical mass of industrial use cases and signals that the market size is vast for truly problem-solving AR solutions.
So what has changed in the last 18 months? Before, we were seeing AR software companies come into this market with an AR technology searching for a problem, and they found themselves in the innovation and R&D departments of their clients. Successful software providers today operate very differently. Now, it’s people who know what the problems are that are actually developing the AR solutions to solve those business problems. They are bringing deep industry knowledge and applying AR where it makes the highest impact. They are finally treating the enterprise client like they need to be treated, which is by providing a them a real solution to a real problem.
This may seem obvious, but it was not the norm for the last 5 years. The market maturing signals from the software providers are a great sign. Innovation teams buy technology, but business teams buy solutions to their problems. And AR adding real value at scale is the result.
Signals in the AR Ecosystem: People
For any mature market, the ecosystem is probably the biggest necessity, and that includes human talent.
What does an ecosystem mean here? We're not only talking about the hardware and software applications, but also the people. AR talent, who are creating the workflows, selling the solutions, and implementing on-site. Folks working on occlusion, shadowing, audibles and so much more.
Today, there’s a growing pool of experienced AR talent that knows the technology – how to build it, where it’s best applied, and who are fluent in the nuances of how it drives value. Some of that’s being driven by those that have been in this game for years, and others who are entering thanks to the allure of mobile and consumer AR apps. It’s an important signal that our industry is maturing, with a community surrounding it that will continue pushing to the next level.
Signals in AR User Interaction
Important developments have taken place around user interface and gesture-based interactions that are pivotal for AR as a whole.
AR becomes truly effective is when the user experience is natural and intuitive. When that cognitive dissonance disappears, and you gain a complete and utter belief in what you're seeing in front of your eyes. That’s why what’s possible today with user interface and gesture controls is so important. You don’t have to have clunky, uncomfortable interactions or learn a new type of language to interact with AR. We have multimodal options that are natural, intuitive, and what the human expects. When it makes sense to reach out and touch something or it’s faster to just speak the command, we can enable the user to do that. Swipe, scroll, speak, gesture – whatever maintains a users engagement. This multi-modality is possible today across more devices than ever including RGB camera devices.
Bottom line, AR interactions can happen in a way that speeds user acclimation, minimizes language barriers, and puts the user first, are imperative for the success of industrial AR applications that are intended to be used for an entire eight hour shift.
Signals in AR Enterprise Demand
We can tell that by looking at the hardware firms, which are a great barometer for where the industry is. Two years ago, the average order size for smart glasses was less than 2 – about 1.3 units per order. What did that mean? The mentality was simply “Buy one and try it.” Now the order demographics are in the 10s, 20s, and hundreds. For example, after years of trials and small 5 +/- unit deployments, DHL recently announced a network-wide deployment of 440 Glass Enterprise Edition 2 devices.
So what does this look like now? This means one production line is being deployed. One service garage at a time, or one area of a warehouse. No, its not the 10,000 unit big-bang order that investors want to see, but in all actuality it makes sense for B2B, and is another strong signal that the industrial AR market is currently scaling.
Why do we think deployments of 20 units should be considered deploying at scale? AR in the enterprise must mix in with the current tools, systems, and automation that exist already. If not, it will never be adopted. Enterprises do not stop what they're doing one day, change all their processes and put new hardware in everybody's hands the next day. There are existing systems and investments that were made – the blank canvas or “green field” opportunities are rare…that's just not where industrial AR technology is being deployed today.
That’s the natural flow of how problems get solved in the enterprise space – and it’s the reality that those in the AR community must face head-on. Enterprise adoption of any technology takes time. And AR doesn't get a pass. But the good news is that built on the blood, sweat, tears, and frankly, exit of several companies in this space, the AR market is maturing. And today, the demand is there. Companies are looking for solutions. Orders demographics are going up for hardware and software, and new client testimonials and use cases are being announced on a regular basis. Amazing things are happening.
What’s Next? Driving Scale.
So, all we need to do now is implement at scale. Although its starting, a critical mass of scaled deployments is what the industry is missing. It’s what the AR solution providers need. And it’s what the people that have invested hundreds of millions of dollars in the space need. Everybody needs scaled deployments.
So how do we get there? With proven methodologies that drive deployment and proliferation within organizations.
Enterprises don’t want “disruption” – what they want is iterative, consistent improvements, optimizations, and problem-solving solutions. And it’s proven and indisputable that AR can deliver this. What companies need are the methodologies, the processes, the focus, and the discipline, to implement AR technology that is always going to be iterative, with new hardware coming down the pipe that's going to enable even better experiences. But if you wait for that, you'll wait forever. So we must focus on deploying AR now, finding the use cases that work today with the hardware that's available today with the software that's available today, and drive value into your organization today.
Enabling Scaled Enterprise AR Deployments
Lance-AR was founded with one mission: to enable scaled Enterprise AR deployments. AR for the Now-Term. We’re applying proven methodologies to help AR Solution Providers and Enterprises achieve the scaled deployments that the industry needs. For Enterprises that’s everything from AR Education, AR Interventions, and AR project Revivals, to Assessments and Deployment Planning to move from ideation to full implementation. For Solution Providers we’re bringing expert Product and Go-to-Market Strategy, Marketing and Demand Generation Services, and AR Recruiting to build the best teams.
We’re bringing our AR expertise to make scaled deployments a reality today – in the Now-Term. We’ve seen that the market needs it, so we’re doing it. And if you need help, we’re here for you.