Bill Brandon. I'd like to begin by introducing Rolf Illenberger, the CEO of VRdirect. The name of his company explains why I asked him for an interview. Rolf, thanks for accepting. Can you tell us something about VRdirect?
Rolf Illenberger. Yes, sure. We provide a software solution to primarily large enterprise customers, companies like Siemens and Porsche. The software enables them to, let's say, master virtual reality projects. The best way to think about our solution is PowerPoint for VR. It's really a tool for the everyday user. Our hypothesis is that VR is going to become some kind of standard technology for enterprises, especially in the field of learning and development. And our solution is intended to make it as easy as possible for the everyday user.
BB. Thanks for that, Rolf. What do you think we can expect in 2023 for AR/VR products or devices?
RI. For VR, this is an exciting time. I mean, we're just three weeks away from Apple releasing their headset in early June. We are expecting Samsung and Google, who have partnered up to release a headset, probably by the end of the year, but perhaps in early 2024. We are waiting for a headset from Lenovo to be released this summer, probably around August or September.
And then if you look at the VR device market, we will have a situation by the end of this year that we're going to have three distinct big players in the space that everyone has heard of—which would be Meta, which is out there already with its Oculus device, then Apple, then a Google-Samsung device. You’ll also have three key players from China including Pico, which is owned by ByteDance, the mother company of TikTok, Lenovo, and HTC. So by the end of the year, or let’s say early 2024, we will have six key tech players, already tech giants, competing for market share in this emerging technology. That's going to be quite an interesting phase in the market. All six of these players know and understand what the stakes are. All of them have seen the smartphone market.
We all know that the smartphone market has developed over time. There were five ecosystems that were competing at the beginning of the smartphone era. There were iOS and Android, the two ecosystems that ultimately prevailed. But there was also Windows Mobile, there was Symbian, there was Blackberry. We are in a similar situation as at the beginning of the smartphone era, just that the players today know that the early days of this new technology are critical because now it's all going to be about market share. The question is which of these ecosystems will prevail? Will there be two ecosystems that prevail? We don't know yet. But that's a very interesting phase in the market. We will see a lot of fierce competition because all of these players know what's at stake. All of these players have deep pockets to subsidize hardware to leverage their existing operations when it comes to the iOS ecosystem at Apple, or when it comes to the distribution and sales network, like Lenovo, a key player in the laptop market. All of these players will leverage their existing capabilities to make sure that they gain a relevant or even dominant market share in this emerging technology. So that's got to be a phase in the market, probably 12 to 24 months, until we see some kind of consolidation and might know which ecosystem will ultimately succeed in this race. So that's, that's what's happening in the VR market right now.
I have to say that we are not acting within the AR market. Obviously, I observe this market, but it's not our market. AR is not yet at this point. AR technology is way more difficult to master. We probably need, I don't know, two, three years until augmented reality will be where virtual reality is already. Ready to be deployed at large scale, especially within enterprises. That's the hardware overview when it comes to VR and AR technologies.
BB. What’s your expectation about how easy or simple it will be for training and development organizations to gain some facility in the use of VR?
RI. Well, let’s try to break this down a little bit. First, the hardware side. I think we're already there with the hardware that we have today from the six different players that I have mentioned. Arguably some of them still need to release their headsets but we are at the point where the VR technology is ready to be deployed on a large scale. So hardware is not going to be a big issue in the future. Check this box.
Then we have the software side. Players like my company are active and provide easy tool sets to create content for this new hardware category. The players are already quite advanced and making it simple for a broad user base to create content. I would say this is also ready for a kind of a check.
The big issue in my experience is the understanding of how this technology can actually be used. So people have to get experience with this new technology. We have to face, let's say, trial and error: What works, what doesn't work? How can this new technology be deployed and rolled out within the enterprise context? The challenge, especially for learning organizations, in my opinion, is mostly about understanding this new content category, what works, what doesn't, and then building up expertise and experience in actually creating learning and development content for this new content category.
BB. Will there be requirements for new types of equipment? For example, a lot of what I've seen for the development of virtual reality applications, has involved 360 degree cameras and knowing where to stand so that you're not accidentally in the shot. What types of things are you finding that we’re going to have to deal with in the in the enterprise adoption?
RI. You mentioned 360-degree cameras. Clearly, let's say that’s the starting point when it comes to content creation for this new technology. It's quite simple to produce this content. For a lot of enterprises and enterprise users, 360 content is the easiest kind of content that they can relate to. So, if you take the images and 360-degree videos from within your factory or facility, that is something you know. You can enhance 360-degree images and videos with overlays of text and interactions, and whatever's needed to bring across the learning content. The next step is then moving into real 3-D content, so that you can actually move in and walk around in this environment. That's clearly more difficult to create. You still need to be somewhat of a specialist to create proper 3-D content. This will still take some time. However, this will become easier when we have the next evolution of cameras, which includes cameras that can take depth information. Assume 360-degree cameras, but with depth information. You position a 360-degree camera in a room. And it not only takes a picture of the room, but it actually takes a picture including the depth information that will allow people to actually move around in the room so that you just take the picture. But that's really the next evolution in terms of camera technology. There are already other developments, like the LIDAR sensors of the Apple devices. That still needs to have some iterations in terms of development and quality of the content. But that's got to be the next step.
When it comes to the question, “What kind of content works best?”, it's really up to the use case. If you want to bring across very simple or less complex content—like how to behave when in a factory environment—like safety instructions, 360-degree content is perfectly fine. If you want to bring across more complex content like pilot training or training a surgeon, you will eventually have to use a proper 3-D creative content to live up to the complexity of the situation.
BB. How complicated or complex is editing the VR content once you’ve got it?
RI. Not complicated at all with a platform intended for the everyday user. This is something everyone can do. If you're capable of creating PowerPoint slides or working with Photoshop, you can easily master VR content creation with the right software. Again, we're talking about 360-degree content. When it comes to proper 3-D worlds, you still need to have some kind of specialist software today. That's still more a topic for experts or more advanced users. But what we experienced with many enterprise users is that they start with the technology or the complexity that they can obtain today, which is 360-degree content, eventually adding 3-D objects. Then over time, they will move into proper 3-D models.
BB. Do you foresee more adoption of VR, once there are reasonably priced headsets available?
RI. I don't think that price is a hurdle at all. Even today, the headsets that we have in the market, let's take the Meta Quest Pro device, price is not a problem. For our customers like the big enterprises, price is not a problem, not even $3,000, or whatever the price for the Apple headset will be, is a big challenge.
The challenge for enterprises in adopting this technology is different, with different aspects. It's around data privacy, it's about making this hardware compliant with other internal regulations. I'll give you a very practical example. The Meta Quest Pro headset has, I don't know exactly, like eight or 10 outside-facing cameras. That's what the device needs in order to position within the room. But for many European companies, you have very high regulations when it comes to filming and recording environments, right, you have to have the consent of other people in the room, you have to have the consent of the employer, and you have to be allowed to film the environment. These are like the very practical challenges that we still have to solve in order to make these headsets compliant with internal rules and regulations. The price is not a problem.
BB. You mentioned privacy. That’s the GDPR.
RI. Yes, GDPR. That's a big topic for European companies, a big topic. The GDPR is the law in Europe. So every European enterprise has to live up to the GDPR laws. And they're very strict when it comes to privacy in Europe. It’s a challenge if data is going to be processed outside of the EU, anywhere else, or even in China. And so European companies want to know what happens with the content that this device might film, not saying that it's that this content is being filmed on purpose. It's just a technical thing that this device needs to permanently record its environment just to function the way it's supposed to function. But European companies need the assurance that the content that's being filmed by these cameras is not going to be processed outside the EU. In the US it's possible to have your content being processed outside of the European Union, but there's very high regulations as to what's allowed and what’s not allowed. That's a big challenge for European companies to make VR headsets and their current checking technology setup compliant with current European data policy. That's a big hurdle for many Europeans, that's really what they're working on in order to make 3-D specific headsets for wider use.
BB. I expect that there will be plenty of opportunities for exchange of expertise in that area. Most of our readers for Learning Solutions magazine are in North America and Canada. We have a lot to learn and a lot to find out about the whole data privacy topic.
RI. I think the data privacy topic is not easy. It's a problem throughout the entire digital world. We have today the privacy issue also with regard to social media platforms, with regard to mobile phones, and digital devices. I think some of the players like Apple are going into extending the priority to protect people's privacy and people say that, but there are a lot of concerns with delay to big companies.
BB. Rolf, this has been very informative. You covered a lot of ground in 30 minutes, and thank you for the time. I’m excited about where we are headed with this technology.
RI. Well, Bill, it was great talking to you.