Growth of Extended Reality in Business: Discover Why Companies Everywhere Are AdoptingXR Technologies Like Never Before in 2023
Introduction
Extended reality (XR) has seen a recent surge in adoption and usage across various business sectors. XR encompasses virtual reality (VR), augmented reality (AR), and mixed reality (MR), providing immersive digital experiences that enhance traditional workflows. Cost reductions, technology improvements, and COVID-19 have accelerated XR implementation to boost productivity, collaboration, training, marketing and more.
This article explores the key drivers making XR more pervasive today. We’ll cover the major benefits of the exponential growth of extended reality in business, and business capabilities and discuss examples of impactful XR applications. Examining key trends and outlooks, it’s clear XR is becoming a vital technology for the modern enterprise.
Key Takeaways:
- XR enhances processes like design, manufacturing, collaboration, training, marketing and customer service.
- Falling costs of XR hardware and software increased feasibility for businesses.
- The pandemic sped adoption as XR enabled remote work and online experiences.
- Tech advances like 5G, edge computing, AI, and photorealistic graphics bolster immersion and use-cases.
- Industries like engineering, healthcare, retail, construction, and education are leading XR usage.
- As headsets shrink in size, and become easier to use, XR will likely become ubiquitous across business.
Why is XR Usage Growing Across Industries?
Improved Collaboration and Communication
XR enables collaboration across distributed teams like never before. VR spaces with avatars allow in-person-like interaction from anywhere. AR overlays augment in-field tasks with remote guidance. This unlocks new levels of efficiency and expertise sharing.
- VR collaboration apps like Meta’s Horizon Workrooms create office-realistic virtual meeting spaces using VR headsets. Workers join as personalized avatars to brainstorm on virtual whiteboards, share screens, jointly edit 3D models, and more.
- Doctors can use AR headsets to stream live video to remote specialists who can annotate and guide medical procedures. Technicians also use AR for quicker equipment repairs with expert support.
- Hybrid MR solutions like Microsoft’s HoloLens 2 enable local users to collaborate with remote parties on holographic content blended into physical spaces. Employees can interact with the same 3D schematics, designs, data visualizations or mockups using a mix of real and virtual elements.
More Intuitive Interfaces and Data Visualization
XR provides uniquely intuitive ways to visualize and interact with data by blending digital elements into the physical environment. This amplifies insights and decision making.
- VR data visualization places users inside fully immersive graphical representations of data that they can dynamically explore and manipulate. This helps spot insights from multi-dimensional data.
- Telecom providers like Verizon use AR to overlay network infrastructure data onto real world-views for engineers to easily track network statuses and required fixes during maintenance.
- Medical students use AR/VR to study detailed interactive 3D visualizations of anatomy that bring concepts to life in ways static images cannot.
Increased Manufacturing Productivity
XR enables manufacturers to streamline operations, improve quality assurance, optimize prototyping and upskill staff.
- Volkswagen uses VR simulations of production facilities to identify and implement efficiency gains without downtime or disruption. Engineers can collaboratively review modifications in an interactive virtual environment.
- Machine operators can access step-by-step instructions and tutorials overlaid in AR headsets to quickly learn new processes and accelerate productivity.
- AR is used to overlay digital guides on manufacturing equipment so staff can rapidly locate components requiring service. This cuts maintenance costs and downtime.
More Engaging Customer Experiences
XR enables brands to more memorably engage customers by creating immersive digital experiences and richer product interactions.
- Retailers implement AR apps that let shoppers digitally visualize how products would look in their homes prior to purchase. For example, IKEA’s app overlays true-to-scale 3D furniture models into user’s rooms via mobile AR.
- Instead of static 2D images, travelers can preview 3D virtual tours of rooms and amenities at hotels and resorts. Marriott offers virtual VR tours of some properties.
- Automakers like Porsche and Volvo allow customers to fully customize vehicles with VR configurators that display photorealistic environments.
Optimized Design Processes
XR enables designers across industries to create and iterate on concepts more quickly and collaboratively leading to better outcomes.
- Architects use VR to rapidly develop digital 3D models of buildings and spaces customers can virtually walkthrough instead of relying on flat mocks ups. Stakeholders can provide immersive design feedback.
- Automakers build VR prototypes of new vehicles to comprehensively evaluate ergonomics, styling, controls, and safety factors before production. This reduces costly physical prototypes.
- Product designers use AR to overlay digital renderings of concepts onto physical objects to identify refinements and quickly cycle through iterations.
More Impactful Training and Simulations
XR transforms training by enabling extremely realistic simulations that drive productivity and safety. Experiences are highly-engaging while less risky and costly than real-world exercises.
- Doctors refine medical skills from surgical training to bedside manner using VR simulations of human anatomy and virtual patients. This provides valuable practice before working with real people.
- Enterprise employers use VR new hire onboarding to swiftly acclimate staff with equipment, facilities, processes, and company culture through immersive training modules.
- Aircraft manufacturers employ AR tablets to project step-by-step instructions over airplane equipment during trainee maintenance and repair sessions. This augments hands-on learning.
- Heavy equipment operators safely master machinery like excavators, cranes, and bulldozers through realistic VR simulations that build skills at a fraction of the cost of real equipment.
More Cost-Effective Travel Reduction
With climate change concerns and tightened budgets, XR provides businesses a cost-effective way to cut expenses associated with travel.
- Instead of in-person meetings, companies use collaborative VR spaces to enable the same lively group interactions with zero travel. Attendees join as avatars from anywhere.
- Sales teams can provide demos and simulate equipment maintenance for prospects in engaging VR environments without leaving their office.
- Hybrid AR/VR solutions even enable field teams to stream first-person video feeds to remote experts who can annotate their real-world view with digital pointers and instructions.
XR Market Trends Driving Adoption
Several key trends are propelling increased XR adoption across the business landscape today.
Falling Prices of XR Hardware
Rapidly declining costs for AR and VR devices makes investment more accessible. Enterprise and consumer-grade headsets are dropping below key feasibility thresholds.
- The market-leading Meta Quest 2 headset costs just $399, while enterprise VR gear from HP and Varjo range from $1,500-$5,000 putting immersive experiences within reach of many businesses and users.
- Similarly, Microsoft’s HoloLens 2 AR headset lowered to $3,500 making it realistic for more companies to deploy augmented reality.
As prices continue falling, XR hardware is entering a phase of mass adoption.
Maturing XR Software Platforms
Robust enterprise XR ecosystems are emerging from companies like Meta, Microsoft, HTC and Varjo. These provide crucial tools for custom app development, system integration, device management, collaboration, avatar creation, user analytics and more.
This enables businesses to more readily develop and deploy augmented and virtual solutions aligned to strategic priorities whether training, design, sales, or operations. As platforms mature, implementation costs and hurdles lower significantly.
More Capable and Compact XR Devices
Continuous hardware improvements also expand practical applications.
- Headsets are getting smaller and lighter. For example, Meta’s high-end Cambria headset weighs just 0.571 lbs versus 1.31 lbs for Quest 2. This improves comfort for prolonged use.
- Performance gains in processing power, graphics, displays, sensors, eye-tracking, and haptics heighten realism of experiences which drives engagement and effectiveness.
- Connectivity enhancements like integration of 5G enable reliable and responsive access from anywhere without lag disrupting immersion.
- Built-in cameras and AI allow headsets to map physical environments and blend anchor digital objects and overlays into them. This expands AR capabilities.
- Improved hand/controller tracking and touch feedback make interactions more natural.
As headsets evolve, they’ll provide richer experiences in sleeker and easier to use form factors.
Impact of COVID-19
Remote collaboration demands spiked during the pandemic. XR provided solutions allowing enterprises to enable continuity of operations and connections between people.
- With offices closed, companies rapidly deployed cloud-based VR environments like Meta’s Horizon Workrooms for immersive virtual meetings.
- Travel restrictions pushed firms with distributed workforces and customers to adopt XR training and maintenance tools.
- Retailers implemented AR mobile apps to lower on-site visits and enable virtual showrooming.
For many companies, these emergency use cases seeded lasting XR adoption and created internal proof points justifying expanded investment.
Leading Industries Embracing XR
While XR use is accelerating across most industries, some sectors lead adoption today.
Manufacturing
From design to training to production, XR unlocks manifold benefits for manufacturing including:
- VR simulations of facilities and processes identify safety and efficiency improvement opportunities. Engineers can collaboratively explore modifications.
- AR-guided workflows boost assembly and machine operation productivity. On-demand training helps upskill new staff rapidly.
- AR remoting lets production experts remotely supervise and assist floor workers to resolve issues faster.
- VR prototyping shrinks development costs of products, tooling, and robotics systems. Realistic digital simulations enhance outcomes.
As a result, XR investment in manufacturing continues growing quickly.
Healthcare
Healthcare strongly leverage XR technology for:
- Visualizing patient anatomy in 3D enhances understanding compared to 2D images. VR aids complex diagnosis while AR benefits live procedures.
- VR simulations boost competency and confidence of doctors, nurses, EMTs, and med students through immersive practice scenarios. This ultimately improves patient care quality.
- Pharma researchers use VR molecular modeling to accelerate drug discovery. VR also aids development of surgical robots.
- XR tools help rehabilitate and assess patients by gamifying physical and cognitive therapies.
Healthcare is anticipated to remain an aggressive driver of XR adoption.
Engineering and Construction
For architects, engineers, construction firms and real estate:
- VR and AR enable collaborative design reviews letting stakeholders collectively visualize and manipulate models in real-time. This improves outcomes.
- Workers use AR glasses on-site to overlay building information models onto in-progress construction augmenting processes.
- Repair and inspection tasks harness AR remoting instructions for faster and safer workflows.
- XR supports sales centres and design mockups letting prospects explore spaces immersively.
As firms target sustainability and productivity, XR brings new potential.
Retail
Retailers continue onboarding XR for applications including:
- In-store kiosks allow browsing products in VR like furniture placed in personalized virtual environments. This builds confidence and intent.
- AR mobile apps enable at-home previews placing accurate 3D models of products into customer living spaces.
- VR simulations provide experiential employee learning opportunities from customer service to machinery usage.
- With VR product configurators, shoppers can customize purchases like cars with high verisimilitude.
XR shopping experiences differentiate retailers and boost engagement.
Training and Education
Beyond business, XR strongly benefits:
- Vocational learners master equipment and workflows safely via VR instead of risking real-world practice. Scenarios build job-ready skills.
- K-12 and higher education instructors use AR/VR to create highly-engaging interactive lessons in subjects from history to science. Immersive experiences inspire.
- Workplace training graduates learn faster and with improved retention thanks to XR practice environments and simulations.
As XR proliferates in the classroom, graduates proficient with related technologies enter the workforce ready to use them in business settings.
Major Challenges Hindering XR Adoption
While momentum builds, barriers continue slowing XR uptake including:
Perceived Cost
- Upfront hardware/software costs can appear daunting, especially for smaller firms. However, prices are falling rapidly.
- Developers and creatives skilled in VR/AR remain in short supply making some companies reluctant to launch initiatives.
- But outsourcing custom XR projects is increasingly viable with specialty agencies.
Concerns About ROI
- Lack of internal expertise to quantify ROI leads companies to underestimate benefits and underinvest.
- However, accumulating data shows XR consistently drives productivity, sales, and employee improvements across industries.
- With experiential marketing, retailers see ~30% higher conversion when customers use VR or AR before purchasing.
Trouble Integrating into Existing Tools
- Inadequate organizational digital literacy to smoothly integrate XR alongside existing systems and processes slows adoption.
- But third-party integration services and increasingly turnkey enterprise XR platforms help bridge gaps.
Physical Side Effects
- Minor side effects when initially adapting to XR like eye strain or nausea occur for some users.
- But next-generation headsets dramatically reduce these issues through improved displays, optics, form factors, and ergonomics.
- With proper introductory guidance, users can usually acclimate quickly.
While hurdles remain, collective progress from enterprises, platforms, agencies, and hardware makers is rapidly smoothing adoption.
Future Outlook Remains Strong
XR shows no signs of slowing momentum as real-world use cases proliferate across sectors. Consulting firm PwC projects the global XR market growing from $46B in 2022 to over $120B by 2026. Likewise, IDC sees spending on AR/VR surging from $16.8B in 2022 to $72.8B in 2024.
With several key trends converging, XR adoption appears poised for massive expansion:
- Hardware prices will continue decreasing even as device capabilities improve further.
- More immersive experiences will drive engagement across applications like design, marketing, and research.
- 5G and edge computing will enable light connected headsets usable anywhere.
- Photorealistic CGI and AI will make virtual interactions nearly indistinguishable from reality.
- Training simulation fidelity will keep improving, making XR indispensable for productivity.
- Turnkey enterprise XR platforms will simplify deployment and maximize value.
While friction points still exist, XR provides such singular value that adoption is inevitable. As technology progresses, extended reality will transform from futuristic novelty into an integral mainstream workplace tool. The window for firms to strategically implement XR is now open, but it won’t stay that way long. Businesses should move quickly or risk disadvantage as competitors embrace new capabilities.
The potential for XR to revolutionize workflows, collaboration, and customer experiences is real and here today. While practical use cases already proliferate, we’ve likely only scratched the surface. The only remaining question seems to be how rapidly companies will onboard these tools, not if. Extended reality marks the next major paradigm shift in enterprise technology adoption.
Frequently Asked Questions about Extended Reality (XR)
What are some key benefits of XR for business?
Some major benefits include:
- Improved remote collaboration through VR/AR workspaces and avatars.
- More intuitive data visualization via immersive 3D environments.
- Faster manufacturing workflows using AR assistance and VR optimization.
- Better customer experiences using VR/AR product previews and customization.
- Optimized design processes from collaborative VR reviews and AR prototyping.
- Effective corporate training through VR simulations for skills building.
- Cost and risk reduction by minimizing travel and enabling remote expert guidance.
How can XR improve employee training and onboarding?
XR enables extremely realistic and safe simulations for training across applications like:
- Equipment operation – practice using heavy machinery in VR before real-world operation.
- Procedural training – AR overlays provide visual step-by-step job aids to learn processes faster.
- Software and systems – VR guides familiarize employees with business apps and ERP interfaces.
- New hire orientation – VR onboarding fast-tracks new hires on culture, tools, facilities.
- Soft skills – VR role playing improves sales pitches, presentations, client interactions.
- Compliance – VR simulations verify staff understand safety policies.
- Leadership – Managers refine skills through realistic VR situations.
What are the key differences between VR, AR and MR?
- VR (virtual reality) fully immerses users in a simulated digital environment like a headset. No outside world is visible.
- AR (augmented reality) overlays digital elements onto views of the real-world environment via devices like smart glasses.
- MR (mixed reality) blends virtual and real worlds, with virtual objects anchored and interacting with the physical space. Microsoft HoloLens provides an example MR experience.
How can businesses quantify the ROI of XR initiatives?
Metrics to measure XR benefits include:
- Productivity – Compare output rates before/after AR-assisted workflows and VR optimizations.
- Quality – Defect rates and rework scores with XR-aided manufacturing or inspection.
- Training efficiency – Time and cost to graduate trainees from VR vs traditional programs.
- Sales – Win rates and deal values with VR demos vs without.
- Issue resolution – Frequency and speed of field fixes with AR remoting guidance.
- Travel costs – Savings from replacing in-person events with VR meetings.
What are key considerations when getting started with XR?
Important steps for XR success:
- Evaluate use cases aligned with business goals – training, design, client demos etc. Don’t force-fit technology.
- Plan minimum viable pilots focused on targeted pain points vs broad deployments.
- Buy logistics – choose headsets, apps, and third-party services matched to your needs.
- Address physical space requirements for some VR applications.
- Ensure sufficient WiFi coverage and capacity, especially for collaborative VR spaces.
- Start user exposure with demos to build familiarity before formal training.
- Develop policies for usage, support, maintenance, sanitation, motion sickness mitigation etc.
Emerging XR Applications to Watch
Beyond current use cases, a variety of promising novel XR applications are emerging across industries.
Immersive Virtual Showrooms
Retailers are creating virtual reality showrooms that let shoppers browse products in interactive photorealistic 3D environments.
- Customers wearing VR headsets can explore stores, view 3D products on shelves, and interact with items. This merges the experience of in-store shopping with the convenience of online.
- Automakers have created virtual dealerships in metaverse spaces like Meta’s Horizon World where visitors can configure vehicles, take virtual test drives, and speak with sales agents.
- Real estate firms are developing VR open house tours allowing remote prospective buyers and tenants to visit 3D rendered homes and spaces from anywhere.
As metaverse technology evolves, virtual showrooms will become a standard sales and marketing channel.
XR for Remote Workspaces
XR creates virtual workspaces that distributed teams can collaborate in together using avatars, duplicating the immediacy of physical offices.
- VR spaces like Meta’s Horizon Workrooms enable colleagues to interact around virtual meeting tables with integrated video chat, screen sharing, and productivity apps.
- Spatial computing platforms allow users to pin notes, photos, calendars, and data visualizations onto physical walls or virtual boards visible by the entire remote team.
- Hybrid solutions even allow local and remote team members to jointly manipulate the same 3D models, schematics, or virtual whiteboards.
As workforces and customers remain distributed post-pandemic, XR generates connectivity and reduces travel burdens.
Computer Vision for Enhanced AR
Advances in computer vision and AI will enable mobile AR apps to better understand and map environments, improving overlays.
- Algorithms that can identify surfaces and objects in the camera view and generate physics enable more life-like AR interactions.
- For example, mobile AR shopping apps will realistically place virtual furniture onto flooring taking into account textures, lighting and obstacles in the surroundings. Items will seamlessly occlude and interact with real objects.
Expanded computer vision bolsters AR realism and capabilities.
Haptics and Hands for Natural Interactions
Controllers that track hand motions and provide touch feedback lead to more natural user interactions in XR.
- New controller form factors modeled on hands with haptic gloves enable grabbing, squeezing, swiping in VR/AR to manipulate digital objects using familiar gestures.
- Hand tracking cameras also enable interacting in virtual environments using only bare hands. This removes barriers for mass adoption.
As options for input expand beyond joysticks and buttons, experiences become more immersive.
Neurometrics for Insights
Using neurometric sensors, XR platforms will better understand user cognitive state and emotions during experiences.
- Biometric data like heart rate, eye movement, facial expressions, and brain activity will allow platforms to assess reactions in VR/AR environments.
- Analytics will help refine designs and experiences to optimize engagement, effectiveness, and sentiment.
- For marketing, neurometrics provide invaluable data on customer preferences and pain points for XR demos.
Adding a neurometric layer will allow personalization and insights from XR usage.
While cutting-edge, these emerging use cases demonstrate the extensive possibilities still largely untapped in the XR domain. As technology progresses further, many interactions we take for granted in the physical world will be recreated virtually to expand human potential.
Conclusion
XR infiltration into business is rapidly accelerating thanks to improved hardware, lower costs, evolving platforms, and application momentum across industries. Immersive experiences provide unprecedented capabilities for collaboration, visualization, productivity, training, and engagement unachievable through traditional tools.
As headsets shrink further and become as ubiquitous as smartphones, XR will transform from hyped novelty into absolute necessity. While meaningful use cases already make XR an attractive investment, the surface is only scratched of its full disruptive potential.
Businesses that quickly embrace XR tools and methodologies will gain an early competitive moat, while laggards risk obsolescence. Moving forward, companies must re-imagine processes, products and business models using XR as an integral component instead of just an add-on. The next major computing paradigm shift is here.