Microsoft Continues $22 Billion HoloLens IVAS Deal

HoloLens IVAS secures phase 2 developmental period with US Army, following governmental blockades

Microsoft Continues $22 Billion HoloLens IVAS Deal
Mixed RealityLatest News

Published: September 11, 2023


Rory Greener

This month, Microsoft successfully completed an MR hardware trial period with the US Army, allowing the firm to continue innovating the Hololens product while leveraging a massive military contract which currently sits as a $22 billion investment for the US Army. Microsoft is undergoing a research and development (R&D) period with the US Army to refine version 1.2 of the HoloLens Integrated Visual Augmentation System (IVAS), an MR device for in-the-field soldiers.

Based on a budget request earlier this year, Microsoft is aiming to secure a further $165 million in 2024 while dedicating $76 million for IVAS v1.2 development processes.

The US Army’s Assistant Secretary of the Army for Acquisition, Logistics and Technology approved Microsoft’s request for a phase two development period for the IVAS device – following governmental blockades earlier this year.

Lt. Col. Denny Dresch, the IVAS product manager for Program Executive Office Soldier, added:

We would like to emphasize testing at scale. If afforded the opportunity we would like to be able to test at the battalion size level for the operational tests.

Despite a series of unstable months, Microsoft’s development of a purpose-built HoloLens IVAS device for active military personnel secured continued support from the US Army.

Following a testing period led by the 1st Battalion, the Infantry Regiment, the 1st Infantry Brigade Combat Team, and 10th Mountain Division soldiers, the IVAS v1.2 will continue the R&D processes towards the developmental stages.

Program Executive Office-Soldier commander, Brig. Gen. Christopher Schneider also remarked:

Now, we have to make this system producible and affordable.

The US Army will continue to invest time and capital into the long-standing contract, with soldiers providing feedback on the device to optimize HoloLens IVAS for potential field usage in 2025.

IVAS Version 1.2: What’s New?

HoloLens IVAS version 1.2 dramatically improves the military-ready MR device, using feedback provided by US soldiers earlier this year.

Following the previous crucial testing phase, the most recent IVAS iteration leverages MR visualizations to assist soldiers on the field by displaying tactical heads-up displays (HUDs), thermal vision, night vision, and passive targeting.

Moreover, the recent iteration contains minor improvements such as device visibility at night, weight, and form factor to enhance usability for soldiers in hazardous environments.

IVAS v1.2 will also come with an integrated digital storefront allowing soldiers to access MR applications ready for specific military field use cases, such as targeting assistance for Grenadiers, terrain maps for construction personnel, and virtual shooting training tools.

Schneider explained that via solider feedback and input, “it’s easy to build an app to deliver to the soldier something they want to do.”

In future IVAS iterations, Microsoft will be integrating cloud computing frameworks to assist with delivering high-quality MR RT3D content.

The History of a $22 Billion Contract

Despite Microsoft’s recent success when testing IVAS v1.2, the firm’s long-standing military contract faced immense pressure from the US Congress earlier this year- putting the HoloLens’s future into question.

US governmental officials were dubious over the IVAS contract, primarily stemming from the substantial capital investment and soldiers filling many device complaints during testing.

In January, US Congress blocked a contract between Microsoft and the US Army, which would have facilitated the distribution of roughly 121,000 IVAS devices – a multi-year deal potentially worth $22 billion.

US Congress blocked this move due to negative feedback during IVAS testing programmes, forcing Microsoft to complete a massively reduced contract distributing only 20 IVAS headsets.

The US Senate Appropriations Defense Subcommittee cut around $350 million from the Army’s $400 million procurement request in August 2022, leading to the reduced IVAS v1.2 testing period.

However, despite the mid-year scaleback, Microsoft has successfully showcased usability improvements, securing further scalability support and funding from the US Army.

But will Microsoft see future IVAS success? The firm has a history of ups and downs while working alongside the US Army.

The US Army and Microsoft partnership saw soldiers first receive IVAS 1.0 headsets in October 2021. However, following the IVAS debut, the testing programme and the wider HoloLens team faced significant roadblocks, with the US Army describing the IVAS headset as “not combat ready” last year.

The IVAS has come far since its debut. But a history of blockades and mixed user feedback means that Microsoft may not be smooth sailing yet.

The IVAS project still has a long developmental process to go if Microsoft wants to see its HoloLens device paired up with active soldiers – outside of testing processes.

Moreover, Microsoft appears to be aiming for a distribution window in 2025, falling in line with the firm’s refocused industrial Metaverse vision.

The Bigger Picture: HoloLens 3, MRTK 3, and the Industrial Metaverse

However, what does the IVAS device have to do with the rest of Microsoft’s XR roadmap? Well, it could hold a huge stake for the company.

The capital investment assists Microsoft in pursuing its immersive interests, and the continued feedback and R&D may help Microsoft refine its Hololens offering to secure a powerful third product iteration.

In the past, Microsoft representatives noted that a new HoloLens product would only come when the firm makes significant technology improvements.

With its IVAS testing, the firm may find new design features that could represent this required step up in technology sophistication.

In June, Microsoft’s Vice President of MR, Scott Evans, noted:

No one wants to be obsoleted for 10% better capabilities. They don’t need a successor yet, but they want to know it will be there at the right time.

For example, earlier this year, Microsoft filed a patent request for an MR device with similar design features to the IVAS v1.2 device.

According to Microsoft’s patent request, the conceptual device will have a lighter design, modular framework, rigid frame, front visor lens, back visor lens, integrated sensors, waveguide optics, and display/projection devices. Moreover, the patent outlines design features like the latest IVAS device, such as dimmable displays.

Additionally, Microsoft partnered with Magic Leap and Qualcomm this year to revamp Microsoft’s Mixed Reality Toolkit 3 (MRTK3) for developers and enterprise partners – the SDK behind many HoloLens applications.

The partnership sees the firms take equal stakes in scaling the MRTK 3 framework, transitioning the product to its own independent organization within the Microsoft-owned firm GitHub.

The move opens MRTK3 to further investment by a broader range of users and hardware developers, with the firm debuting the general availability of MRTK3, ready for developers, later this week.

Magic Leap also noted how the MRTK3 partnership enables the firms to deliver an open ecosystem that scales developer opportunities and helps enterprise end-users gain “complete control” of their workplace immersive solutions, with the firm also adding that “walled gardens” hold back the potential of XR.

Robin Seiler, the Corporate Vice President and Chief Operating Officer of the Windows + Devices organization, Microsoft, added:

Given their expertise and contributions, we are grateful to solidify their support and investments in the MRTK3 program and look forward to continued collaboration.

The news of Microsoft’s HoloLens, IVAS, and MRTK 3 updates comes as the firm prepares an industrial Metaverse for 2024.

Earlier this year, Microsoft quietly teased information regarding an industrial Metaverse initiative at its Inspire 2023 showcase event covering its latest innovation.

Microsoft’s industrial Metaverse roadmap will also offer a “curated learning path” to provide end-users with resources to introduce workplace XR technology, with considerations for integrated first-party technologies, such as Microsoft Co-Pilot, Azure OpenAI, AI, ML, Azure Databricks, Synapse Analytics (2024), Microsoft Fabric (2024), Microsoft Purview, Power Platform, D365 Field Service, D365 Guides, D365 Remote Assist, HoloLens 2, Azure Maps, Azure HPC product, and Azure Digital Twins.

Microsoft launched its industrial Metaverse roadmap as part of its AI Cloud Partner Program, which brings significant partners together to fuel growth and innovation towards enterprise-grade AI to boost enterprise use cases of AI, Cloud, and Metaverse solutions to improve productivity, resiliency, and sustainability outcomes.

Microsoft to Leverage AI for Immersive Success

Microsoft is launching its industrial Metaverse roadmap to leverage the firm’s recent AI innovations.

The firm believes that AI and XR will exist side-by-side to improve outcomes for various enterprise use cases. Notably, Lili Cheng, Corporate Vice President of Business Applications and Platforms at Microsoft, explained how its investments in the emerging generative AI-powered service CoPilot will also improve MR dynamics guide service for XR headsets.

The AI investments lend a hand in optimizing Microsoft’s XR solutions for frontline operations. Microsoft services such as Dynamics 365 Guides provide a spatial environment that allows frontline workers to access Microsoft brand collaboration tools, such as Teams.

Integrated AI features allow XR-ready frontline workers to complete repair procedures – which can become a significant blocker – with increased efficiency, connecting workers “beyond their physical limits,” remarked Cheng.

Cheng also noted the importance and roles of integrated technologies such as digital twins, explaining that RT3D visualization and data allow frontline workers to “receive a better understanding of the machines and processes at hand.” The VP said that AI enhances integrated XR technologies.

Cheng added:

Mixed reality is the eyes and ears of AI. Delving into operation nuances for personalized, in-depth learning becomes easier. When integrated, mixed reality and AI accelerate worker training, shortening steps and supplying users with the working knowledge they need for the task at hand.

As Microsoft’s industrial Metaverse roadmap rolls along, it will come with various integrated and related technologies. Meanwhile, leading towards 2024, current success stories such as the IVAS v1.2 approval could assist Microsoft in securing its place in the 2024 immersive technology market as the space gains significant competition from Meta, Apple, and others.

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