Virtual, augmented, and mixed reality systems are now starting to sell in large numbers – and TD SYNNEX is dedicating more resource to this growing area of the market. We spoke to Harry Ellis, business manager – mixed and virtual reality at TD SYNNEX, about the potential for VR/AR/MR becoming a technology that can generate serious business in the future.
The IT industry is great at talking-up new technologies, and virtual reality (VR) has been one of the most discussed in recent times. Yet, after a flurry of excitement, VR seemed to grind to a halt. However, the belief of tech visionaries remained strong. Continued investment and commitment by the likes of Facebook (with Oculus), Microsoft (Hololens), and Google (Google Glass), has kept virtual, augmented, and mixed reality in the spotlight.
Their faith is now starting to be rewarded. According to IDC’s Worldwide Augmented and Virtual Reality Spending Guide, AR/VR revenues are expected to accelerate out of the pandemic, growing from just over $12.0 billion in 2020, to $72.8 billion in 2024 – a five-year compound annual growth rate (CAGR) of 54%.
Harry Ellis, business manager – mixed and virtual reality at TD SYNNEX UK, has an even more optimistic outlook. ‘By the end of this year, we will already be well above and beyond where we expected to be by 2024. The CAGR over a five-year time-frame is something like 124%, and over the next two years it will be significantly higher.’
The market has accelerated and sales have sky-rocketed
Push and pull
When he was appointed to the newly-created role back in March, TD SYNNEX was already working with the key vendors and saw a bigger opportunity ahead. ‘There was a bit of a pull and a bit of a push going on in the market. Both vendors and resellers wanted to know if we could help them with AR/MR. Up to then, it had been fairly specialist and we saw there was a good opportunity to change that, to bring our full capability to bear and make complete solutions more available to the channel.’
Since then, the market has accelerated and sales have sky-rocketed; TD SYNNEX has almost tripled its initial expectations for the current year. While some of this is related to winning business from key retailers, much is due to the wider growth in demand. The Oculus Quest 2 headset has been particularly popular with consumers in recent months. Good ‘triple A’ content is available for the platform, which has really helped to drive sales.
While the consumer market generates the majority of business, enterprise sales of AR/MR solutions have also been growing at a three-figure percentage rate – and that’s expected to continue into 2022. The investment that TD SYNNEX has made and the focus on AR/MR that’s resulted from that has also contributed greatly.
In the consumer market, the popularity of the Oculus Quest 2 is down to the excellent balance of features and price it offers. These are just right for the current market, in which many users are still learning about and experimenting with the technology. There is real momentum in the consumer market, and it will unquestionably see further rapid growth as users get more confident and new products come onto the market – as they are expected to before the end of the year and into 2022. For retailers, the technology is starting to demonstrate its enormous potential.
TD SYNNEX expects to see strong growth from the commercial and public sectors over the next year
Profit potential
A similar effect can be seen in the commercial and public sectors, although here the applications are, by necessity, specific to industry needs. And whilst in pure revenue terms, business and public sector sales are dwarfed by consumer sales, the profit potential is much higher for partners. There is a lot of consultancy, design, and development work to start with – and good potential for a services wrap too.
The technology is already being used in myriad ways. Training new staff before they take up positions is one of the most popular. In the healthcare sector, for example, VR is being used to help people work through cognitive behavioural therapy. In retail and leisure it is being used to show bar staff how to operate machinery and serve food and drinks. MR tech can be used while people are actually working, showing users what they need to do next and what to look out for as they perform tasks – ideal for training a barista, for instance.
There have been some major investments, in the manufacturing sector, in logistics, and in exploration, and more are in the pipeline. TD SYNNEX expects to see strong growth from the commercial and public sectors over the next year. ‘I’d be very surprised if we do not beat our target by some distance’, said Harry Ellis.
Our ambition is to turn this into something which you don’t need to be that specialised to sell
Shift selling
All that business will be going through partners, he noted, and not just specialist consultants and vertical market ISVs. One major UK reseller has set up its own dedicated unit to address the AR/MR market and has started to win business. Others are making their way in as well.
‘This is the shift that we are seeing, and our ambition is to turn this into something which you don’t need to be that specialised to sell. There are probably a handful of resellers in the UK right now who are selling bespoke solutions built around a particular piece of hardware. Then there are one or two larger partners that have built a team to focus on immersive technologies – things like AR/MR, but also drones and other emerging tech. They are already closely-engaged with the key vendors and have good capabilities on those technologies in-house.
‘What we expect to see from this point is more resellers opening their eyes to the possibilities in AR/MR. It will become more widely adopted in the business market and there will be more opportunities.’
To most partners today, AR/MR is something really new. The resellers that have got involved up to now have done so of their own volition and investment. As the market develops, TD SYNNEX’s intent is to provide partner enablement resources for AR/VR. It is also looking at services and adjacent technologies it can offer alongside, and at specific software and product that it could bring together as complete solutions, ready to take to market.
Our challenge is to make it accessible and available to as many partners as possible
A genuine opportunity
This is all part of TD SYNNEX’s plan to make AR/MR a genuine opportunity for many more partners; to make it a technology that will drive growth, increased profitability, and real differentiation. That plan will start with the recruitment of a focused team; three more dedicated heads will be onboard and working with Harry Ellis by the end of this year. Their mission will be to spread the word about AR/MR and its potential, and to encourage further exploration and involvement of partners.
‘Once the team is in place’, said Harry Ellis, ‘we will have resource and we will be able to do so much more. We will have the ability to go out, demonstrate the products, talk to partners about them, and evangelise the technology. We want to make a name for ourselves in AR/MR. We want to be the leader in this space. To do it first and to do it best. Our challenge is to make it accessible and available to as many partners as possible. We are already seeing the end user demand in the market, so the opportunity is there.’
While there are only a small number of partners taking VR/AR/MR to market today in the UK, Harry Ellis expects many more to be involved in a year from now. With the investment TD SYNNEX is making – in people, programmes, solutions, and wrap-around services – it will have plenty to offer. It should prove to be an exciting journey.
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