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Augmented reality technology still 'experimental' in the enterprise

Augmented reality isn't all fun and games. It has the potential to change how we interact with the world around us, and its next stop is the business world.

This article can also be found in the Premium Editorial Download: Modern Mobility: Augmented reality technology is coming to a business near you:

Pokémon Go, the wildly popular mobile game, brought augmented reality technology to the masses. Next stop: the enterprise.

Pokémon Go displays the physical world that a player sees by using his or her smartphone's camera and then augments that reality by adding digital characters that players must capture. (A Charmander character may appear to be sitting in a player's driveway, for example.) It also uses the phones' location-based services to draw players to real-world landmarks and buildings where they can further interact with the game.

Within two months of its July release, more than 500 million Google Android and Apple iOS users had downloaded Pokémon Go, and it had the most successful debut of any app in the history of Apple's App Store. Now, augmented reality (AR) is knocking on the door of enterprise IT.

"One reason for the success of Pokémon Go is how real it is," said Ashish Agrawal, senior engineering manager at AR vendor Mobiliya. "It had a tremendous impact to the entire industry, both to consumers and enterprises. It's a proven proof of concept."

Still, augmented reality has a ways to go before it reaches that level of success in the business world. Organizations must figure out the best uses, and questions linger around cost, return on investment (ROI) and user acceptance.

Pokémon Go character
A Rattata appears in a player's backyard in the augmented reality game Pokémon Go.

"It's not a technological problem," said Mark Sage, executive director of The Augmented Reality for Enterprise Alliance (AREA), an industry organization that promotes AR adoption. "It's getting the workforce to use it."

The basics of augmented reality

Perhaps the first roadblock to adoption is confusion around the difference between augmented reality technology and virtual reality (VR). AR combines the physical and digital worlds into one seamless user experience -- a digital Charmander in a physical driveway displayed on a smartphone, or digital blueprints overlaid on a physical aircraft engine displayed through headgear. VR, on the other hand, immerses the user in a completely digital experience.

Both technologies have their place in the enterprise, said Christine Perey, an independent analyst and board member of The AREA. VR is valuable for rendering and interacting with objects in the design phase, before they've been built, whereas AR improves the way people work with physical assets, she said.

AR Roadblocks

Cost/ROI: Hardware and software are expensive and hard for many businesses to justify.

User readiness: It's one thing for a consumer to download a smartphone game. It's another thing entirely to ask a skilled mechanic to don a bulky headset and take a new approach to inspecting and repairing an airplane.

Lack of development tools: "It's not currently easy to build out AR and VR apps, so the tools market has to get better," analyst Jack Gold said.

Despite the popularity of Pokémon Go, it's important for organizations to realize that a mobile app is just one way to deliver AR experiences -- and in the future, it probably won't be the best way. Many workers will need to use their hands to perform tasks when viewing AR displays, and that's not easy to do when holding a mobile device. As such, smartglasses, headgear and other hands-free devices will become more prevalent, Sage said.

"If you need to use your hands, then wearables are the best option," he said.

Projection AR, which uses light and lasers to project digital information onto physical assets -- e.g., displaying product information on boxes on warehouse shelves -- is another emerging way to deliver AR experiences.

The state of the AR market

In the enterprise, the augmented reality software industry generated $247 million in revenue in 2014, but that number will skyrocket to $2.4 billion in 2019, according to Juniper Research. Early adopters include businesses in the aviation, aerospace, automotive, utilities, manufacturing, construction and healthcare industries.

"We're in the experimental stage for most companies, and it's going to take two to three years to get more mainstream," said Jack Gold, principal analyst at J. Gold Associates in Northborough, Mass.

It will take a while for organizations to figure out AR's business model and uses, he said. Even most early adopters are only doing pilot programs or proof-of-concept deployments right now, Sage said.

"We're still yet to see it used across the whole of the enterprise," he said.

We're in the experimental stage for most companies, and it's going to take two to three years to get more mainstream.
Jack GoldJ. Gold Associates

AR is best suited for highly complex, labor-intensive tasks that aren't easy to reproduce or repeat -- basically, situations where it's not possible or cost-effective to build robots to do the work. Most satellites and all aircraft carriers, for example, have unique designs, and that high level of customization requires a high level of human involvement, Perey said. Augmented reality technology can help workers building satellites and aircraft carriers be more efficient and effective by giving them real-time, hands-free access to blueprints and other design materials, she said.

Another popular use is for inspections and design reviews. An AR device's camera can view an assembled piece of machinery, and the software can compare it to the original blueprints to identify any discrepancies. Or the camera can feed its view to another person in a different location for a manual review of the assembly -- like a video conference with a point of view, Perey said.

Augmented reality requires augmented budgets

Aside from their use cases, the industries that have adopted augmented reality today have something else in common: a deep aversion to risk. If a maintenance error leads to a plane crash, for instance, the resulting lawsuits and negative publicity could bankrupt the airline. The cost of AR technology is high, but these types of organizations are willing to pay because the cost of not deploying it is even higher.

"Errors cost a lot in some industries," Perey said. "Their technology investments will pay for themselves more quickly."

Organizations in other industries, however, may have a hard time achieving ROI at this point, and that's stifling mainstream adoption. Costs will decrease and ROI will become easier to realize as the technology becomes more standardized, Gold said.

"Everybody's AR devices are different," he said. "They're proprietary. And their volumes are low, so they're very high-cost."

It's not just hardware and software that's contributing to the problem, either. An AR system requires a back-end cloud infrastructure, middleware to connect the front end to that infrastructure and a robust network to support those connections -- all of which adds to the cost.

"AR is a problem solver, but it does not live alone," Argawal said. "It lives in the midst of lots of other technologies."

Companies are also reluctant to invest in AR because many of the vendors in the market are unfamiliar in the business world and because the technology evolves so quickly, Perey said.

"Whatever you buy today is not going to be valid in months," she said.

The analytics of AR

Even if Pokémon Go proves to be a fad, it will have left a lasting legacy for the augmented reality industry.

Before Pokémon Go, most discussions around augmented reality technology focused on the user experience -- the blending together of the physical and virtual worlds. But now, the game's system of capturing characters, collecting supplies and visiting specific locations has opened up a new world of possibilities, Perey said.

There's been a realization that organizations can use augmented reality technology to see what their users see and what tasks they perform at a given location at a given time. More importantly, organizations can collect and analyze that data to identify patterns, inefficiencies and opportunities for improvement.

Business leaders probably don't care about harvesting Pokéballs from Pokéstops and using them to capture Venonats and Metapods. But they will care about the valuable insights gleaned from the new types of data that AR can gather.

This article originally appeared in the November/December issue of the Modern Mobility e-zine.

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