When designers at Siemens started using virtual reality (VR) to quickly evaluate early-stage ideas, the usually slow and costly design-and-iteration process went from days and hours to minutes.
Siemens is collaborating with the Finnish startup Varjo, the maker of human-eye-resolution enterprise VR goggles, which enable designers to sketch, test and tweak prototypes in 3D, passing the best options to the simulation experts for almost immediate feedback.
“Traditional workflows from idea to detailed design to prototyping to manufacturing are undergoing a big shift with rapid prototyping and new visualization tools entering the market,” said Niko Eiden, CEO of Varjo (which means “shadow” in Finnish). “Companies are expecting to be able to try out ideas much earlier in the process.”
Moving workflow to VR also helps users unfamiliar with complex CAD and simulation tools to be actively involved in the design process—promoting greater connectivity and flow of ideas between scattered R&D teams.
After COVID-19 hit, Siemens’ corporate tech team started working in a virtual simulation of their lab, doing demos for people from around the world.
Siemens is among the growing number of companies betting on VR for the future of manufacturing.
In April, Varjo, which also works with Audi, Airbus and Volvo, announced plans to expand its footprint into the Asia-Pacific region, citing a “tremendous” interest from companies seeking to tap into VR technologies for training, collaboration, industrial design and research.
The timing is right.
As the global pandemic is upending industries around the world, more enterprises are forced to experiment with cutting-edge tech amid social distancing orders and restricted travel.
“COVID-19 has increased the need to access and meet around projects in lifelike virtual environments, which can be built on the same feature sets Varjo has been pushing for immersive workflows,” Eiden said. “It’s clear that the way we work has started to fundamentally shift, and this pandemic has accelerated the recognition of an investment in technologies of the future.”
More than half a century has passed since Morton Heilig, often regarded as “the father of VR,” invented one of the earliest prototypes—a 3D video machine that let users ride a virtual motorbike while experiencing the sounds and vibrations of the road.
Since then, the tech has grown in leaps and bounds, riding several “next big thing” waves but never experiencing wide adoption.
Now, with remote work and travel restrictions firmly established, industry experts and analysts are trying to peer into the future.
They are watching for signs of a long-overdue breakthrough despite the looming recession, supply chain disruptions and investment declines.
“Crisis has a way of accelerating things,” Charlie Fink, an AR/VR consultant, said at XR Immersive Enterprise in May. (Extended reality, or XR, is an umbrella term for virtual, augmented and mixed reality.) “One of our problems was demonstrating relevance and urgency, and I think those two questions have been answered.”
While VC investments in VR startups are expected to plummet this year, and Main Street companies are not likely to order hundreds of headsets amid dwindling revenues, solutions like remote collaboration and virtual training will inevitably garner more enterprise interest in the long run, according to SuperData Enterprise, a Nielsen research company.
In April, analysts revised their 2023 estimate of enterprise investment in XR-related R&D and external development up by 4 percent, to $15.9 billion, to account for the effects of COVID-19.
“VR is very well suited for remote working reality, and I think it will bring a lot of attention to potential solutions for remote collaboration, which really sets XR companies to weather the current storm and really succeed well in the long term,” Carter Rogers, principal analyst at SuperData Enterprise, said at XR Immersive Enterprise in May.
That prediction is already becoming true for firms like Imeve, the San Francisco developer of a remote virtual presence platform, Avatour. The cloud-based service deploys 360-degree cameras connected to a smartphone at the host site to facilitate live virtual facility walkthroughs, factory inspections and site-specific training.
Remote participants can join a session using any desktop browser, mobile device or a VR headset for full immersion, communicating with each other, as well as with hosts. Its packages start at $15,000 a year.
“It’s a tidal wave,” Imeve CEO Devon Copley said of the incoming inquiries he has been receiving since the beginning of the pandemic. “It’s gone from talking to innovation people at the headquarters about a trial to line managers calling us up and saying, ‘Can I give you my credit card and can we test it tomorrow?’”
Using Imeve’s technology, a San Francisco-based iPhone accessory maker was able to pay a virtual visit to its manufacturing partner in China and walk along the production line to review new COVID-related procedures.
Meanwhile, an automotive industry supplier that works with Imeve conducted parallel virtual training demos for its factories in California and Thailand.
“Before the pandemic, when we started working with customers, there was a clear value proposition that the amount of time and money that was wasted by getting on an airplane is very high,” Copley said. “But now, of course, the urgency to find a substitute has changed.”
Global shutdown is only one factor driving momentum. When gaming companies introduced 3D arcades in the 1990s, the VR boom quickly faded as customers became frustrated with clunky technology plagued by low computing powers, inferior graphics and time lags.
Today’s innovations have overcome obstacles: computers are powerful enough to render realistic virtual experiences, while the smartphone industry is spurring innovation in displays and sensors, according to Goldman Sachs. “As the technology advances, price points decline and an entire new marketplace of applications hit the market, we believe VR/AR has the potential to spawn a multibillion-dollar industry, and possibly be as game changing as the advent of the PC,” Goldman Sachs analysts wrote in a 2016 report that experts are still citing.
Companies like Varjo and Facebook are already pushing in that direction.
Facebook, which owns VR headset maker Oculus, rolled out its enterprise platform last year, making way for more remote collaboration apps.
Varjo develops industrial-grade mixed reality, convincingly merging the virtual and real, thanks to video pass-through technology that uses cameras to digitize the world in real time. That data is then combined with virtual content and shown to users through headsets.
Wearing XR goggles equipped with cameras and sensors, Volvo engineers have been test-driving a real Volvo XC90, overlapping the real road, nature and road signs with the things they want to evaluate.
Varjo’s enterprise VR headsets come with resolution equivalent to 20/20 vision, which lets users see the difference between knitted fabric or printed fabric, and an integrated hand-tracking technology that removes the need for physical controllers.
“We are now at a stage where both the hardware and software can finally deliver the same experience as in reality,” said Varjo’s Eiden. “In other words, true-to-life digital twins can now be explored in a virtual environment with the same quality and resolution as in real life.”
Immersive workflows deliver especially well in projects where the environment plays an important role, he said. For example, architects can see how daylight will be experienced in a building they are designing.
VR also offers advantages compared with traditional methods, such as building clay models, because it is accessible to remote global teams, saving companies time and money. For example, building a virtual replica of a nuclear power plant control room can save up to 90 percent of the costs compared with building physical models, Eiden said.
More than 60 percent of enterprises that invest in VR are using it for training, according to SuperData.
The Nielsen researcher estimated that firms that deployed VR/AR/XR training technology saved $13.5 billion last year that would otherwise have been spent on instructors, dedicated training spaces and traveling to remote facilities.
For example, telecommunications company Ericsson used VR training to onboard engineers at its new 5G Smart Factory in Lewisville, Texas, months before it began operating in March.
New employees were able to virtually tour the firm’s factory in Tallinn, Estonia, and ask questions to colleagues 4,900 miles away—who participated live as avatars on top of pre-recorded content.
Yet, there are still many barriers for VR technology to go mainstream, including the current slowdown of hardware manufacturing, supply chain delays, as well as significant hesitations around investments.
“Many companies that were not already invested in VR are not going to invest today, instead waiting for a more normal market,” said Eric Abbruzzese, a research director at ABI focused on AR/VR.
“Some use cases for VR are still quite valuable and even more so today, such as remote training, but the CapEx and OpEx for new implementations is a tough sell right now,” he added. For example, producing three CG training modules up to seven minutes long that are based on an existing curriculum can cost $100,000 to $500,000, depending on the depth and complexity of the project, said Amy Peck, senior director of enterprise content at HTC Vive Studios.
As companies scale, that price tag comes down if 3D assets and environments can be re-used for other modules.
With limited quantifiable data about VR’s impact, it’s challenging to convince top managers, who often don’t have any familiarity with the workflow integration, to make a significant upfront investment, she said.
“If someone hasn’t been in a headset and doesn’t understand what that value proposition, the real sense of presence, is and the problems it can solve, it’s really hard to sell it,” Peck said. “We try as much as we can to do demos and expose high-level executives to how they can really leverage this technology.”
Peck and her team have been working on a selection of the best off-the-shelf solutions for more generic safety, soft skills and career and technical education training, which allows companies to license existing content under a SaaS model and measure ROI with far less financial risk, she said.
Yet, this year VR has propelled to the top of R&D lists for many companies. The global shutdown has also created an opportunity to pause and build “a much bigger vision for how we move forward side by side with technology,” Peck said.
“Let’s actually look at the future. What are our products and services? What does collaboration look like? What does design look like? And what do we want in our lives? And let’s look at building that future, working backwards from there, and use technology as an ingredient in a larger recipe.”
In any business case, the discovery phase is an important first step. When companies investigate using virtual reality, they rarely have an exact list of problems they are trying to solve, says Chris Scharver, a senior software solutions architect at Mechdyne.
“There is a lot of engagement on our end as part of the discovery and solutions process to determine what they want to accomplish and why it’s important,” he said. “Who’s involved in doing it? Where does the data come from? What types of interactions they want to do? There are many different conversations that we have with different groups.”
The next step is finding possible solutions, including hardware, software and other services.
“What kind of display capabilities would meet their needs? Whether it’s projectors, LCD panels, multiple VR headsets, we handle all of those as well and it’s almost always custom,” Scharver said.
Another necessary component is determining expectations for return on investment, which is unique to each company’s workflows and costs.
Companies can start estimating potential ROI by analyzing where VR can add value across design, production, sales and marketing, and test ideas on small-scale pilot projects, Mechdyne said. Exploring different use cases can help uncover VR’s soft value in terms of boosting collaboration and decision-making.
While large-scale VR systems like wall-sized displays or surround-screen immersive displays can require modifications to physical location and power, companies can use a multipurpose space for other needs, such as high-end video conferencing or presentations.
“At the end of all these conversations we are having, how do you quantify the success?,” Scharver said. “Frequently when we push on that, we find that it’s something that has been given thorough consideration.”
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