VRguy podcast Episode 4: J.P. Gownder, Forrester Research, on the Crossover Between Enterprise and Consumer Markets

JP Gownder, Forrester ResearchThis episode features J.P. Gownder, Vice President and Principal Analyst at Forrester Research. This episode was recorded on Mar 25, 2016

J.P and I discuss the crossover of VR and AR development from the consumer world to the enterprise and vice versa. We talk about the positive and negative impact of Google Glass on the evolution of AR, missing pieces for interaction, key use cases and more.

J. P. Gownder’s expertise is in devices and platforms. His research covers virtual and augmented reality, wearable computing, tablets, smartphones, robotics, and the devices and systems that power retail experiences, including digital signage, beacons, and mobile point of sales. He also has expertise in operating systems, software, applications, and the digital platform wars. J. P.  collaborates with other analysts to create the I&O workforce enablement playbook, which helps companies serve a more mobile workforce that uses a wider variety of devices such as tablets (e.g., Apple iPad) and online services (e.g., Dropbox) to do their job

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Interview transcript

Yuval Boger (VRguy):     Hello, JP, and welcome to the program.

J.P.:        Thank you.

VRguy:  Good to be talking with you again. Would you mind telling everyone who you are and what do you do?

J.P.:        Sure. I’m J.P. Gownder. I’m a Vice President and Principal Analyst at Forrester Research based out of Cambridge Massachusetts in the US. I am an analyst who covers devices. I cover everything from PCs and tablets to wearables, to AR and VR, and even a little bit of robotics. Of late, I’ve spent a good bit of time on the VR market, which I think is timely.

VRguy:  Absolutely. You cover both the consumer and enterprise markets, right?

J.P.:        I have to look at the market in a very holistic fashion to make the research calls that I do. I work with a lot of enterprise decision makers who are trying to figure out how to choose and support and develop successful virtual reality for either employees or for customers. I also look at the consumer market, which is a leading indicator of how consumers are going to be addressable by those enterprises, as well as being critical to understanding the fundamentals of VR.

VRguy:  Excellent. It seems that a lot of the media attention on the consumer side has been focused on VR, whereas on the enterprise side, it’s more on AR. Is that your impression as well in terms of where the action is?

J.P.:        I think you could probably say in broad scope that that has been a trend. I think that’s in part, because AR is so immature outside of the enterprise. It’s mostly … When we’re talking about head mounted displays like smart glasses, really enterprise is essentially the only game in town on the AR side. However, there are lots of VR applications going on in the enterprise space. I think we can think of them in a couple of different ways. One would be for internal use with your employees, let’s say corporate training, or collaboration, or some other areas, data visualization for example.

There are some things going on where we say VR can be used by employees to solve particular problems that are sort of operational in nature. Then you also have a much bigger market of people using VR in an externally facing way with their customers, whether that’s in a marketing campaign and retail setting. On a roller coaster, which is a great example that we’ve seen recently, to change the business model of roller coasters. There is that B2B2C customer-facing aspect of VR.

I think, to be honest, if one were to look too closely at just the consumer market for VR, you’d be missing a lot of important trends that contribute to the overall assessment of whether this technology will take off. In other words, there’s a lot of interesting stuff going on in the enterprise space and in the consumer space outside of, let’s say, gaming.

VRguy:  One of the cross-over products that has been experimented with, both in consumer and the enterprise, was Google Glass. We know that there were social push back on it. “Am I being recorded?”, “What’s this weird thing on your head?” That probably set AR back just a little bit. Of course I think there are going to be additional attempt. Do you see AR in the enterprise more in the confined areas where working in the warehouse helps me figure out where the parts are? Do you also see it in customer-facing interactions?

J.P.:        Well, I think your characterization is correct, that the kind of Google Glass experiment set the market back a bit. Particularly in the consumer market, the privacy end goal was very, very disruptive I think to people’s perception. In the enterprise space of course, there’s not as much of a problem here. We have some leading indicators on both sides of this equation. In other words, in compliance spaces like warehouses, or factories, or something like that, well of course there’s no social stigma associated with it.

We know that an increasing number of scenarios can be accomplished hands-free. This could be anything from a surgeon in a surgical room who needs hands free access to computing power and imaging, to a field technician who is fixing a Boeing jet engine or something like that. What we’ve also found is that some early trials are suggestive that when smart glasses are being used in a kind of consumer-facing way that is well-curated and explained, it actually can be useful.

Virgin Atlantic did an experiment, actually with Google Glass, in the upper-class lounge at Heathrow Airport. There’s a lot of concern that perhaps people would be weirded out by it essentially. As one of my colleagues has written, “be cool, not creepy when you’re using technology.” It turned out that customers actually found it very useful, because it was clearly explained. “I have a computer on my face. You’re probably wondering why. Well, it’s so that I can tell you your flight connection time, and I could tell you the best restaurants at your destination without going behind my desk.” I think there is room for both in the AR space, both the back office, as well as the customer-facing, but it is all very new. At this point, we are definitely at a very experimental stage.

VRguy:  Okay. If just continue on the consumer side, what do you think is the biggest hardware barrier to the next wave of enterprise applications? Is it eye tracking? Is it gesture control? Is it longer battery life? Where do you see the next big barrier to increase adoption?

J.P.:        You mean in AR smart glasses specifically?

VRguy:  Yes.

J.P.:        I would say a combination of some of the things you referenced performance-wise from batter life to being able to use the device outdoors, which is a drawback that some of the current offerings. The image just doesn’t work the same way in bright light. I think that we’ve seen a lot of experimentation in terms of user interface.

I think where we’re coming down is it is a multi-modal interaction that includes voice, gesture, and usually some sort of a hand controller, because there are fine tasks that can’t be accomplish by voice or gesture alone. You see these across several of the different platforms that are out there. All of these things will continue to get better at a very fast rate. We’re at that stage of the market where being able to iterate quickly is going to be important on the hardware side.

VRguy:  How do you see the computing platform in the enterprise? Do you see it more in embedded computer in the stem of the smart glasses, or do you see people more carrying tablet or phone, which they might have anyway, and using that really as the processor for the smart glasses?

J.P.:        Well, I think you’re going to see some diversity here of approaches by different vendors who put together the hardware. There are going to be strengths and weaknesses associated with each approach. Having a full power computer is going to allow you to do certain things that you’re not going to be able to do even with a smart phone, even with the great power of today’s smart phones. There will be limits to the kind of visualizations.

when you get to things like holographic, 3D, and the level of integration to the environment, today’s smart phone’s probably can’t do everything that a full on PC unit could do. On the hand, there’s always a tradeoff. How long can you wear a PC on your head? That’s going to be an issue. How well does it work outside? I think you’re going to see a diversity of approaches. One of the key things I think on the enterprise side is that one size will not fit all.

It’s not necessarily the case that we’re going to be moving toward a single kind of form factor. Rather, we’re going to see different workflows that depend on particular use cases that are going to dictate what kind of form factor is appropriate. If you are taking it on and off frequently, that’s going to be very different than if you’re walking miles using it. If you’re using it in a hospital setting maybe just for a few minutes, that will be different than if you are out fixing a jet engine. I think there’s room for a lot of diverse options in the hardware side of the market.

VRguy:  You touched on the computing power, and I wanted to take a question over to the consumer side. Today, I feel that there is a big gap in VR pricing. On one hand you’ve got the $15 or sometimes free, Google Cardboard. On the other hand you’ve got the $1,500 high end computer with a high end consumer headset. Do you feel that it’s time to start thinking about everyman’s VR, or should we still focus on perfecting the VR experience on the high end before we take it down on the price range and the accessibility in terms of who can afford it, how many people can use it?

J.P.:        Very good question. I think Cardboard is a double-edged sword. I think on the one hand it opens up a vast market opportunity for people to experiment with and experience VR, which is very challenging to retail by the way. If you’re selling some kind of a VR headset, first of all, it may not immediately strike people as the coolest thing ever. It could be considered awkward. That is a problem. I think the Cardboard base is a double-edged sword because on the one hand you may experience it and say, “I want to learn more. I want to go up market.”

On the other hand, you may experience it and say, “That wasn’t very interesting. What is the big deal?” It lacks some of the fundamental characteristics like 3D audio, for example, or the power of low-latency environments, or really giving you field of vision that is truly immersive. Those drawbacks are significant. Of course, as well as I that in the early ’90s, there was a boom of VR. It became part of the popular culture. It was in movies like One More Man and Demolition Man.

People were talking about it in 1991, 1992. The problem is never quite solved any of the fundamental technical problems, latency, VR sickness, bad graphics resolution. It just didn’t quite come together because the pre-conditions weren’t there. I think today, what is necessary is to at least take into account the learning we’ve had since then. The good news is because we had that boom in VR in the early ’90s, a brain scientists have been looking at VR for 25 years. What they’ve concluded, if you look at the academic literature, is that immersion really is the key to opening up different pathways in the brain.

That’s where I come up with this assessment that Cardboard could be a double-edged sword. New York Times gave out 1.3 million of them. It would be interesting to know how many people actually used them, and how many people actually liked it.

VRguy:  Yeah. I think that’s a great question. Maybe it’s too cheap to be sticky. May people say, “Oh, this has cool, some promotional item.” or try it for a few minutes and not use it again. I do agree with you that this is going to be a very interesting year in terms of lots of people are going to be able to try VR, whether it’s Best Buy or it’s a Google Cardboard. As a result, more and more people are going to think about all these applications that have been floating around for years.

In my opinion, there are going to be an increasing number of HMD options and peripherals and so on. I think that leads to the standards question. Is it important to have a standard for peripherals for HMD so they can be interchangeable, or is it too early? Again, let the market run with it for a couple of years, and have multiple competing closed garden ecosystems, and then see what happen. What’s your take on how important standards are these days?

J.P.:        Good question. Of course we’ve seen other markets like smart phones that wind up perhaps with something of a duopoly. You have Apple with iOS. You have Android from Google. This creates stresses for users, whether they’re consumers or enterprises for developers. It also locks certain players out. It is generally a fact of life in consumer electronics that there are multiple closed camps, but there are some negative outcomes associated with that.

I think what we’re going to see, whether we should or not, is all of the above. We’re going to see a long tail of devices that as I mentioned may be tailored to particular use cases. That will be very important in the enterprise side of this market. We’re also going to see important kingdoms grow up, and those kingdoms are going to try to create unique value for their users. What I will say though is that we’ve been doing some interviews with developers who are operating in VR environments.

What I think is that a lot of the tools for rendering VR content and applications across platforms, at this point, maybe a little easier than on the smartphone market. That is because the nature of the content, a lot of it is cinematic, or produced cinematic, meaning it’s pixel based rather than camera based. That will be animation or something like that. Some of that content is actually reasonably easy to compile to these different platforms.

I think you’re looking at a case where it’s going to be a bit of a mix. There will be open source. There will be closed gardens. There will also be the ability for developers to take their content and move it across some of those closed gardens. You’re going to see a lot of experimentation. It’s unclear at this point, whether there will be a standard that emerges. For now, I would say that that’s okay. As you reference, this is an early … This is the birth year of modern VR. It’s not that we have to solve all problems in 2016.

VRguy:  Just want to touch one last question regarding the interplay between the enterprise and the consumer. I think that many years ago, Blackberry started making it into the enterprise initially by just private purchases. People would buy the device and could get their email in a mobile way, and then started exerting pressure on the CIO to actually make a corporate decision about that. In which direction do you see the flow of information? Do you see the people who use smart glasses in the enterprise come and say, “Oh, I really should be using this in the consumer setting.”? Do you see the CIO getting exposed to consumer headset and say, “Wow. We really must do something with it in the enterprise.”?

J.P.:        I think we, as an industry, have over rotated on our belief that everything starts in the consumer market. That is to say the consumerization of IT have certainly been the most important trend probably over the past 15 years. That doesn’t mean that everything starts in the consumer market. With wearables, and in particular AR and VR head-mounted displays, you’re going to see some bi-directional seeding going on. You’re going to see things that originated in the enterprise space and then find their way into consumer, and then of course vice versa.

We have, in the next few weeks, some of the major VR platforms on the consumer side coming out with their models. That will be important as well. I think it’s rather more bi-directional than it used to be. Part of that is also driven by the fact that business people, as opposed to technology management professionals, play a much larger role in this. Your average marketer is thinking about not just social media, but “How can I interact with the latest devices? Where can I create unique value?”

I think a more well-rounded view of this would be it is complex and bi-directional. It is coming to just from technology experts, but also from business experts and business leaders. Of course, at the end of the day, customers are the key thing. The reaction that the everyday customer has, whether in their personal life, with their own device, or with the device that you use with them, that will be gauge of success.

VRguy:  That’s been great, J.P. Thank you very much. Where could people connect with you online?

J.P.:        I’m active on Twitter, and that’s @jgownder. I also publish blogs and reports on Forrester.com.

VRguy:  Excellent. Again, thank you very much for coming on the program.

J.P.:        Thank you for having me.

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