Augmented reality: An enterprise business imperative

We hear terms like virtual reality and augmented reality without always understanding what they mean and the implications for business. Beyond cute stickers in Snapchat or Pokemon Go, augmented reality is going to have a profound impact on many parts of our lives including social relationships, professional activities, and culture.

In the coming years, domains as diverse as medicine, training and education, customer and field service, and transportation - to name but a few - will change as the technology companies, telecom suppliers, and governments build the infrastructure needed to support wide-scale adoption of augmented reality.

SEE: Mixed reality in business (ZDNet/TechRepublic special feature) | Download the free PDF version (TechRepublic)

I believe there is no question that innovator technology organizations in the enterprise must start learning about augmented reality. Whether you sell to consumers or B2B, now is the time to plan your augmented reality strategy.

Focus first on the business strategy. Although augmented reality requires a significant technology infrastructure, the business case must drive how you deploy the technology. For example, if your company provides field service, the first step is figuring out how augmented reality can help your organization better serve its customers. If you run a hotel or resort, begin with the question, "How can augmented reality improve the guest experience?".

As with any form of digital transformation, success with augmented reality demands collaboration across the entire organization. The CIO will probably build out the infrastructure; marketing and product development will formulate product offerings; customer service will determine how to incorporate augmented reality in post-sales support. And the CEO will ultimately be responsible for examining the business model implications.

In summary, augmented reality represents a frontier of innovation that will happen; it's only a matter of time.

To explore this topic, I invited two of the world's most prominent experts to participate on Episode 228 of the CXOTALK series of conversations with innovators. Robert Scoble and Shel Israel are well-known technology authors, researchers, and consultants.

Their latest book, The Fourth Transformation, explores the implications of these technologies for both consumers and the enterprise.

Watch the video embedded above and read a complete transcript at the CXOTALK site. As always, you can download the podcast on iTunes. Here is an excerpt from the video with an edited transcript:

What's the difference between AR, VR, and mixed reality?

Robert Scoble:

So VR, first of all, you're in a black box and you're only seeing virtual things. You're not seeing the real world at all. With AR, or augmented reality, you can today use your phone like on Snapchat or on Facebook and aim it at things, and see virtual things on top of the world.

Soon, you're going to be wearing glasses, and soon, being in the next three to four years, you're going to see a range of glasses from companies like Apple, Facebook, Snap... There are ten under development that Shel and I know about, and we probably don't know about all of them. That will lock the virtual image to the real world, and let you walk around it. And, that can interact, and that's really mind-blowing.

I mean, with the HoloLens, you can have aliens coming out of your walls, and they're putting holes in your real wall. You're seeing the real wall, but it looks like there's an alien coming through it. And it's like, mind-blowing what this technology does for education, for retail, for all sorts of things.

Your book is called "The Fourth Transformation." Give us an overview.

Shel Israel:

In the First Transformation, we started with putting words into PCs, on knowledge worker desktops, in the form of personal computers. Then, we went to point-and-click with the McIntosh, and that meant everyone could use these desktop things. Then, we went to touch and mobility, and that brought us into what is now this third transformation where anyone is using digital technology everywhere. Now, we're going to go to a system which is much more intimate than what we have with phones. We're going to have things in a few years that look like glasses I'm wearing. And, they are going to allow us to do all the things that I had just named: MR, AR, VR; and we're not going to look freakish, and we're not going to be tethered to anything.

This means that the customer experience in stores is going to change because they can do things in 3D. They will walk into stores, be at home, and have an immersive experience with the product. This means that surgeons can get assistance while wearing headsets. It means that anatomy students will be doing virtual surgeries in headsets, rather than with frozen cadavers. Every single place we look will be virtual teachers in China, at least; students will learn what looks like what the Civil War was like not be memorizing the name of a battle and by dates, but by actually getting to Gettysburg and getting the full impact of what a bloody war is like.

Wherever you look, whatever you do, it's going to be enhanced with mixed reality technologies.

What kind of investment is needed to make this vision to fruition?

Robert Scoble:

Sensors that are seen around the world that is billions of dollars for R&D. IM-Sense was bought by Apple. Google Tango is doing the same kinds of research; Meta is doing the same kind of ... Everybody who wants to build a mixed reality glass has to build sensors to see the world in 3D and bring it into the glass. Then, you talk about the connectivity that you're going to need, right? Because with mixed reality glasses, you get as many TV screens around you as you want. So, imagine being able to watch CNN here; here, ESPN is playing; and over here, you can watch your security cameras from your business; and over here, you can watch Amazon servers; and over here, you can watch Facebook. You just look around, you have dozens of screens all around you, and you don't have to buy more if you want more screens.

But, to serve all those screens with hi-res 4K or 8K video, or eventually even more in the future, you're going to need a lot of bandwidth, and that's 5G. 5G brings 35 gigabits per seconds down to the glasses, but we don't yet have 5G yet. Verizon has to re-do the architecture on a city because the cell tower needs to be a kilometer and a half from you or closer, and that's not true with today's cell technology. You can be 15 kilometers away. So, they need to put a lot more cell towers into a city, and they put fiber into each one of those antennas, so it's going to bring us 5G. That's coming this year. Verizon is turning on the first 11 cities this year.

You go through the GPU; the GPU is needed to display the polygons. So, when you see virtual things in VR or AR, you're seeing millions of little polygons or little triangles that are underneath what you're seeing; and you'll need a better GPU to process more of those. So, if you want to increase the resolution or increase the frame rates, or increase the experience of being immersed in the media, you need more GPU; or, you need to do a lot of trickery with [...] rendering. And you look at the R&D budgets of NVidia, and AMD, Qualcomm, and other companies that are building these chips; they are spending billions of dollars per quarter in R&D.

Then you keep looking around; companies are building eye sensors. GoogleBot, Eyefluence that's in our book, Facebook product company called Eye Tribe; there is lots of money spent on that, and particularly in the new user interfaces that you're experiencing when you get a glass like this. They're investing that.

You just keep moving down the stack. The whole thing is expensive, and there are ten companies building these glasses, and they're all building their own infrastructure.

And the infrastructure; Apple's building a CDN, so think about putting a server near you, so you have low-latency VR; you can play football with your friends over the internet. That requires a CDN that's a massive new expenditure for Apple and other companies.

Let's talk about one that you're going to hear a lot more about: Facebook was the first one to use this term on stage in a big way; in a big, company way. And that's "SLAM."

Simultaneous Location And Mapping; which means we're building a 3D map of the world, and it's not a map like Google Maps, where there is just a line in the middle of the street, but it's capturing the entire street in 3D. And, we're not just going to capture the street, we're going to capture every surface in the world with these glasses, and build a massive database. How big is that database going to be? Petabytes or Exabytes? How massive [an] amount of server space just to keep a 3D copy of the world at some resolution? You know, let's say a millimeter per pixel or voxel resolution around you? That's a huge amount of data, and that's a billion dollars right there just in a data center to start with. It might be three or four billion, once you are done, and certainly, you are going to have to change those machines out like you do with cloud computing machines at Amazon, for instance. And so, that's, right there, that's a billion dollars, minimum.

And, Uber's building one of those copies, Mercedes is building one of those copies, Google already built one of those copies, Apple's building one of those copies, Facebook is working on this, right? That's what they were showing off when they said, "Oh, you can lock virtual things onto your tabletop. That's using SLAM; the phone instantly builds a point-cloud and then a 3D model of the world, and then starts doing AI to figure out how to lock things properly to the surfaces in your room. And that's going to be something that over the next 18 months, you're going to see a lot more of; because right now, we haven't seen any of the really good AI that recognizes the objects in your room, but that's coming, and that's coming big time according to Google because they're going to use the data that they built off the self-driving cars to bring to our glasses. And how many objects in the street does the Google self-driving car or now Waymo, recognize the hundreds of thousands of things, right? Because it needs to see a stop sign or a stop light and know what to do! And, the glasses are going to do the same thing. When you walk around, it's going to tell you stuff about the world that you're looking at.

What's the time frame for all this to happen?

Robert Scoble:

It's now! This week, Facebook and Snap laid out expansive strategies for this. And if you're not paying attention to that, you're going to get slammed every month because, over the next 24 months, you're going to see ten glasses come out; and big companies come out with major new strategies around this. Apple is the one that I'm looking at the most, and Tim Cook has been out there talking about AR for a year now. Now, we have a question. Does he ship this year, does he ship next year, does he ship in 2019, but certainly by 2019, everybody is in the game! If you're running a business, you have to start thinking about how your customers in three years are going to experience your business as they walk in, or as they call you from this mixed reality world and what their experience expectation is going to be.

How can brands today prepare for this inevitable future?

Robert Scoble:

You need to start getting into VR or getting a HoloLens and start thinking through strategically how your business is going to be changed by these technologies.

Sephora, for instance, already is doing augmented reality signs in the stores, and they're already building augmented reality into their Apple app to augment makeup onto your face so that you could try out pink lipstick, for instance, on the Sephora app on the iPhone or Android. And they're already playing with this. So when the glasses come along, they're already going to have their engineering teams geared up, and they're already going to have a good idea of how they're going to build things, and they're going to be able to build it iteratively and nicely.

And now, a Unity developer is fairly cheap, and in a year, a Unity developer is going to cost three times more than it does today. So, if you convince a Unity developer to come and join your team today, you're going to get them cheaper than you will in a year because Apple and Facebook and Google and Snap are going to wake everybody up. If that's the lesson this week, companies need to wake up to the fact that this stuff is becoming real, and fast. And you need to get into it.

One deep change, your brand is going to be sprayed onto the world. You're going to walk into a hotel in five years, and the hotel is going to be augmented. Disneyland is going to be augmented. They're already working on it. So, their customers are going to walk in with Apple, or Facebook, or Google Glasses, or Snap Glasses, and things are going to be augmented in the park when you walk around.

So, you are going to have to build a new kind of team that hasn't existed, and is a cultural review team, because you're going to make mistakes in this new world that are cultural. You might piss off Trump supporters, for instance; well, that's a lot of people to piss off. So, you've got to run a diverse team of people through your software the same way you run a diverse group of people through, to make sure you don't have bugs and crashes; to make sure you don't make cultural mistakes; make sure there are no Nazi symbols on the walls anywhere ... That's not through the design process. This stuff happens, but you need to have a team to work on this.

Shel Israel:

This is where the humans meet the sensors. This is all this Internet of Things; it has no value unless we interact with it and that's how we're going to be doing it.

In every aspect of learning. [For example] virtual teachers in China. They can't produce teachers fast enough to keep up with students. So now, they're experimenting with a game company in a classroom where kids wear glasses, and they customize their teachers. It can be an old teacher, a young teacher; a teacher watches the student and teachers as the pace where a student learns. The teacher gets bored, the teacher, the virtual teacher, creates a pop quiz right there.

This allows every pupil, for better or worse, to have a customized education at that pupil's ability to learn; no faster, no slower. And you can't do that in a classroom.

So, if you bet against what we're betting on, then you're betting against the best and brightest technology companies in the world, and the best and brightest new developers in the world.

CXOTALK brings you the world's most innovative business leaders, authors, and analysts for in-depth discussion unavailable anywhere else. Enjoy all our episodes and download the podcast from iTunes.