13 minute read
Amber Mac: Catherine you've talked about how this pandemic is a catalyst for XR experiences and a contact-free economy. Can you talk a little bit about what you're seeing out there?
Catherine Henry: Right, absolutely. Well, in a contact-free economy basically it means that we're going to eliminate the touch points along the entire value chain of your company's operations. Everything from upstream activities like supply sourcing, manufacturing, production, distribution, logistics, to the downstream activities that include customer relations and client interactions.
So basically, COVID has really forced us - catapulted us - into this contact-free economy where automation is going to be fundamental. And so therefore we need to innovate all of those processes under this new scenario, so we need new strategies to address those to increase efficiencies, reduce costs, overhead and physical interaction. So luckily, we're in an era where we can adopt mass scale in this capacity with 5G because we have a huge suite of new tools and that gives us a lot new solutions and possibilities.
“COVID has really forced us - catapulted us - into this contact-free economy where automation is going to be fundamental. And so therefore we need to innovate all of those processes under this new scenario.”
AM: When we talk about innovation, we've seen a lot of interesting applications of XR out there, especially within entertainment but perhaps it's still not mainstream. What's it going to take for it to be more common?
CDH: Well, I think one of the things, we're really at a tipping point right now for XR. And by XR it's interesting, a lot of people talk about augmented reality that was very popular years ago. And so, I'm not going to address really the AR applications for manufacturing and facilities maintenance, we already know about that.
What's interesting about this is VR. And so under the umbrella of XR we've got virtual augmented reality but we also have, say AI, because a lot of things enable the other capabilities. But again, looking at specifically the verticals within the XR umbrella, AR has really had its moment, but it's been slowed down because of COVID. And so now is the moment interestingly where we're seeing VR come to light.
And it's really exciting because you know, we've talked about VR as being a sort of stepchild to the AR because it's really been something that's been focusing on the gaming market. But what people aren't really aware of and what I'm really excited to tell you about is that there's a huge non-gaming XR market specifically in the VR space.
And so, we're looking at a market that's already $19 billion, the combined VR and AR market globally according to Statista, and it's growing at a 48% compounded annualized growth rate which is pretty impressive. And we're expecting to see that over the next three to four years thanks to 5G. 5G is going to unleash all of this.
So, we talk about adoption. You know 2014, Mark Zuckerberg first bought the Oculus Quest for $2.3 billion. He had the vision of making VR the next social platform. And he says that mobile is the platform for today and now we're getting ready for the platform of tomorrow. So, what I really want to convey today is what are the business possibilities? What are the commercial opportunities for you who are watching this program to capitalize on in the shorter term? And what I'm saying is that virtual reality is a very significant space to be in.
And so you want to look at new partnerships, build the infrastructure and identify the platforms where you want to be because effectively what we're looking at is the next wave of the new spatial internet. And that's super exciting. Everything that we have in the real world today basically can be recreated on a one-to-one scale within virtual reality. So you know everything from headquarters, I've had people ask me about, one of my clients wants to rebuild their headquarters in VR, you know manufacturing, engineering, AEC, which is Architecture, Engineering and Construction. They're already building scale models, the same way you would on paper, but not only can they see it in a 3D context, they can then blow it up and actually be in that space. So, there are opportunities to reduce costs and overheads and also time to market with VR that are already being realized.
But looking forward, I know that U.S. Air Force, Walmart and Accenture have been using VR for training. So, looking forward all these different platforms for education, for medical applications, for education et cetera, all of these things are being replicated in VR. So that's what we have to think about. It's kind of like the early days of the internet. Do you have a web presence? Do we want to build a web? It was just in 1990s where people started to think about building a web presence. And now here we are in the 2020s thinking about the three-dimensional web and it's a game changer and that's where the opportunity is.
Whatever we're doing in the real world now, we're gonna have to replicate in the virtual world and e-commerce is already there. We already have people in these spaces and there are multiple platforms in this space and I'm happy to tell you more about that.
AM: Yeah let's talk a little bit more about that. When we talk about the application of this technology and specifically the adoption among consumers and enterprises, what's it going to take in terms of that adoption happening quickly over the months or years to come?
CDH: Yeah. Okay so, basically I mean, when we talk about adoption, it's interesting because a lot of people aren't aware that there are already over 100 different platforms in VR for collaboration and communication. Just meeting and conference platforms alone. And we are looking at 3 million different worlds in Rec Room which is one of the most popular social VR sites and another social VR site, VRChat had 17,000 concurrent users. So the evidence is there that people are already going, we've had major concerts like The Weeknd and David Guetta and others are really going on to these platforms where we're seeing the Tribeca Film Festival, the Cannes Film Festival, The Venice VR. So, we're seeing a migration of mass entertainment which is drawing people.
On the other hand, we're also seeing technology developing so quickly that it's really the perfect moment. And mark my words 2020 is the tech tipping point for VR because this is bringing us again into a space where because of COVID, we're able to communicate, collaborate, have meetings in VR and that's already happening again. I talked about Mark Zuckerberg's incredible commitment to this space and how Facebook has done really good work but looking at other companies like HTC Vive, they've also announced that they've got a collaboration tool in the headset that will allow you to meet up with your colleagues in a suite that's already there. You actually just put it on your head and it's already set up. So, it's significantly better than Zoom.
What I want to talk to is about, you know 5G is enabling this because we're basically going from a latency of 20 milliseconds today to just one millisecond. That's about the amount of time it takes to snap my fingers or like a flash on the camera. And so that's a significant difference and so being able to do this not just mobile games but to enable this entire suite of opportunities whether it's education, training, a showroom, you're going to be able to invite your guests, there will be conferences in VR.
All of these things are happening. And Amber to your point, what's happening to evidence that? I think that for the Quest 2 which was just announced last week and I'm waiting for mine any day now, it basically enables you to have access to VR for as little as $300 and you have an entire suite of entertainment and opportunities, artistic opportunities, education. So, it's like early YouTube, there were no demos, there were no tutorials and then it became this rich environment. So that's what we're looking at. And so, I fully expect VR to be a cloud service in the same way that you would see gaming is a cloud service today, VR content as a cloud service. So, networks slices that are developed to that. It's a Green field right now.
AM: You've touched a little bit on 5G. I would love to talk further about the telecom providers role in this evolution and adoption of XR.
CDH: Well, I think the telecoms are rightly, they have to look at their partnerships and they want to look at how they want to be on these platforms, right? So, you know you've got to create a virtualization strategy in the same way that you have to think about what do we want on our website. Early websites if you look back, you know I love reading books by Tim Berners Lee and others and looking at websites’ designs, they're pretty awful. But they weren't as effective, people would take their annual report or their whatever documents they had, their quarterly reports and just kind of post them on the web like flat pieces of paper.
But the exciting thing about virtual spaces is 3D internet means that we have to recreate our corporate presences online and so 5G enables that. It's not just the internet of things that's absolutely fascinating and that's going to unleash a whole range of productivity in the industrial side but whether it's industry or it's entertainment, everyone's going to have to have a virtual presence. And I can tell you Amber, I've done a study recently of multiple different brands. I went to Subway, it’s very popular in VR. Disney has at least a dozen different experiences in VR. And I can assure you none of these have been condoned or approved or are they corporate defined, these are all fun sites.
So what's interesting is that they already have places and people meet up in these spaces. And so, we already have presence in VR but going forward you're going to have to determine your virtualization strategy. Do you want to have a, you know - how do you want to use these platforms? Do you want to have a trade show booth? Do you want to be able to receive clients as a showroom or a sales office? Do you want to just meet your corporate executives? Do you want to have a quarterly meeting?
You know a long time ago I remember webcasts were a big thing for quarterly meetings with investors and now it's a completely different thing. With VR you can access it both by PC so some 70% of people will access a hyperfair or something else by a PC but it's obviously much better in VR 'cause you can stand aside and talk to people.
So how does 5G take advantage of that? Again, you have to decide what your challenges are and how VR can solve them. Would you like to have a trade booth? So, for example, if the Mobile World Congress were to have its next conference as totally virtual, what assets have you got ready? And what would you like to demo? How would you like to receive people? There are meeting spaces in VR, the partnerships, what platforms make sense for you to host the majority of your clients and to handle that bandwidth?
So, there are a lot of opportunities as I said to combine with different partners either in the industrial, e-commerce, retail, that's another huge one we're seeing. E-commerce already, and Sansar just ran a fashion show in VR and people could not only wear the outfits and buy digital outfits but they could also buy the real outfits and have them sent to their homes. So there are two different streams of retail happening and that's going to happen across the entire internet for all assets. So 5G is a game changer and the opportunities for network providers are significant.
AM: It's so interesting because clearly partnership is one way for the telecom industry to move XR forward. Are there any other ways that our audience should consider in terms of ensuring that they are able to do the most with this emerging technology?
CDH: Well, to do the most with emerging technologies, I think it's just important to understand how these things work and the different platforms because in the same way that early apps were developed well, I should basically replicate my website onto my app. Not understanding that those were very different technologies. So, what I would advise is really to understand and I've seen some major brands establish themselves on the absolute wrong programs, platforms rather, in VR for their brands.
So what I'm suggesting is that it's really important to understand before you make an investment, it's like going to the moon you want to make sure you've got all the right equipment and you can actually make it there and back. We want to make sure that when you actually land and you put the flag down that this is exactly the destination you'd like to be and that you're prepared to stay there. So I would just suggest that in making the partnerships and planning how you want your presence in this new world to work very carefully, not with just traditional UI/UX people but people who really understand the spatial web and what it offers.
AM: Catherine, can you talk a little bit about what telecom providers can do in terms of XR experiences to build relationships with their customers?
CDH: Amber that's a really great question and I'm glad you asked it because one of the things I've been thinking about was gaming as a cloud service and a lot of the major network providers and tech companies are in this space. Amazon just mentioned the Luna program a couple of weeks ago and so that's a space where people are investing very heavily but what nobody is really talking about, and this is really interesting is virtual reality as a service.
And I can completely envision that you would have network slices dedicated to different streaming packages where you're allowing some gaming or more gaming, a certain amount of VR film, a certain amount of, you know, there's education in VR, there's exercise in VR, there are conferences in VR, art exhibits. So in the same way HTC Vive has created a trench of different activities. So they have one arts center, one meeting center, one social space which is VRChat. They have the Wave which is a concert space and they have Engage which is an education format. And they put that all in one headset. Well, imagine the same thing as a streaming option for VR.
“I think there's a rich opportunity commercially to create partnerships with some big names and to offer VR as a service.”
So I think there's a rich opportunity commercially to create partnerships with some big names and to offer VR as a service. And there are probably a number of different ways of slicing that but I think that that's something that nobody's really moving on right now and I think that can be very competitive and very commercially rewarding space.
AM: Thanks Catherine and great advice. Thank you so much for joining us today and I look forward to seeing you in a virtual reality experience one day soon.
CDH: I take people on tours all the time, Amber. So please join me, I look forward to it. You can join by PC even if you don't have a headset.
AM: I would love that, thanks so much Catherine.
CDH: My pleasure.
Intrigued by what you've watched? Read more about immersive 5G experiences