This is the second in a series on meetings with emerging tech companies in Finland. This piece, a slightly longer read than usual, captures my observations about Varjo.
Varjo is a provider of cutting-edge virtual reality head-mounted displays (HMDs) as well as several vital enabling technologies for VR. Last Friday afternoon, I wound my way through the chilly, windswept city of Helsinki to the Varjo offices where I had the chance to catch up with Seppo Aaltonen and Annaleena Kuronen, who head up the company’s global sales and marketing efforts respectively. Founded in 2016, Varjo is “on a mission to empower people to do things that are impossible today by merging virtual, augmented and traditional realities.” To be clear, Varjo is focused exclusively on the enterprise, as opposed to the consumer, segment. Given that I was on the hunt for viable use cases for 5G, I was certainly intrigued by the potential for industrial and enterprise applications for AR/VR/XR.
The Varjo proposition
Varjo has released four HMDs in the last year. Three of these are focused on the VR segment while the fourth weaves in AR in a fundamentally different way to create mixed reality experiences. The latest devices are the VR-2 and the VR-2 Pro. The XR-1 is a developer version that is announced but not yet shipping. The biggest differentiating point about Varjo’s devices was the resolution on the devices, with the company claiming these devices offer “human-eye resolution”. Enterprises purchase a combination of Varjo’s HMDs along with a software and services license, which forms the core of Varjo’s revenue model.
I was shown four demos as proof points for the type of experiences that Varjo is enabling for its customers.
The Volvo Car. First, I tried on the XR-1 device. This device is unique in that at first glance, it looks like a typical VR HMD. However, there is a small horizontal panel on the front of the display with cameras that stream video through to the user. In the second or two that it took for me to get used to seeing my Varjo hosts through the HMD, the conference/demo room was suddenly filled by an incredibly realistic looking Volvo sedan. Soon, I found myself “walking into the car” and seated at the driver’s seat, with the car’s entire dashboard visible in striking detail. I was even able to see “through the windscreen” at my hosts. All in all, the only thing I didn’t get to do was go for a virtual test drive!!!
The Venetian Art Studio. Next, I found myself teleported first to a street scene in Venice and subsequently into an “artist studio”. Once again, the XR-1 device rendered the environment in a unique way, with the horizontal panel (from the external cameras described in the previous demo) in the center of the field of view mimicking what a human would see if they were in the room themselves. I was gobsmacked at the clarity and detail on all the objects in “the studio”. As I switched from scene to scene, I noted that whatever came into the view of the horizontal panel at the center of the display had exceptional clarity while the area to the corners was relatively poorer in resolution. It took me a few seconds to get understand that the device was designed to mimic the human experience where the eyes focus on points in their field of view, not the entire panorama. For example, looking at a bookshelf in the studio, I noted that book titles were coming into perfect resolution when they came into alignment with the horizontal panel at the center of the display. Now that’s not exactly what would happen in a real-world scenario where the eyes and head position are not always in perfect alignment. However, this was an incredibly close approximation.
Air Traffic Control. Next, I swapped HMDs and with the VR-2 device, I found myself in a completely virtual world in an air traffic control tower, surrounded by wall to ceiling glass “windows” and tons of screens around me. The really cool thing about the VR-2 device was that it had Varjo’s eye-tracking technology. The eye-tracking was brought into focus on the display with an orange circle that closely tracked your eye movements. As your eyes roved around the brilliantly simulated scene, little pop-ups with flight info on commercial airlines, gates and other relevant information would flash in sync with eye-tracking. I must admit I found it quite distracting in the beginning, especially when my head was still but the orange circle kept bobbing around. It’s possible that the eye-tracking wasn’t completely in sync with the actual movements, but the truth is that I must have been more restless than I was willing to admit in the moment. But this is exactly what a trainer evaluating me in a training simulation exercise would want to evaluate and the eye-tracking produces useful data and insights that can be used for training purposes. In case anyone is wondering, the orange circle that denoted eye tracking can be turned off.
The Commercial Jetliner. Finally, and this was the shortest of the demos, I found myself in the cockpit of a commercial plane. Once again, the detailing and clarity on the surroundings were spectacular, down to the grain on the wood-paneled door behind the pilot seat and the switches on the overhead instrumentation panels. I could just as well have been in a flight simulator but that would have taken more time than we had, and it would also have needed special equipment. Now, I am pretty sure that this is not quite the same as being in a flight simulator but there are likely to be several training scenarios that can be achieved through this simpler medium. The one thing that this setup does not mimic is mimicking turbulent weather and other more ‘physical’ scenarios, but this too could be simulated with special equipment.
The secret sauce
As mentioned earlier, Varjo is exclusively focused on the enterprise market, catering to very specific industrial and commercial applications of VR and XR. So, what makes Varjo such a hot commodity for the enterprise segment? There are three primary technology enablers offered by Varjo that are notable here.
Resolution — Enabled by Varjo’s trademarked Bionic Display, the resolution on the HMDs is a step function better than anything I have seen to date. The resolution on the VR-2 device is a staggering 3000 pixels per inch (PPI), over double the PPI offered by most consumer VR devices. This highly differentiated feature was on full display in the demos that I was shown. Without going deep into specs, I found the visuals almost lifelike. In the demo mentioned earlier featuring the Venetian artist’s studio, the resolution allowed me a near lifelike experience, with a spectacular definition of objects, depth and even an ability to clearly read the titles on a bookshelf. The high resolution is not mandatory in a consumer application, where gaming and entertainment can offset the poorer resolution with light, sound and other entertainment value. But in an enterprise setting, whether for training, architectural, healthcare, maintenance or other scenarios, this level of precision makes all the difference.
Eye-tracking — Varjo’s 20/20 eye-tracking technology is a potentially game-changing technology that opens a whole new raft of applications like training simulations, market research for retail and so on. Through a combination of high-resolution sensors, video cameras, software algorithms and more, Varjo has produced an eye tracker that is far superior to others currently available. For those interested in a deep dive, Varjo has a detailed explanation on their site than is highly recommended reading.
Video pass-through — Varjo has perfected another new technology that has a radical impact on the user’s perception in a mixed reality environment. The case of the Volvo car in the first demo is a case in point. In most augmented reality scenarios, the user is looking at an object and an object or person is superimposed on the “real” visuals to create an augmented reality. However, it doesn’t look too realistic, more like a hologram. Varjo has perfected the art of video pass-through. In the Volvo car example, the car looked solid with tremendous clarity on features, whether it was the metal body or the plastic trims, etc. The same Volvo car could also have featured in the Venice demo or any other scenario. Video pass-through is an exciting technology for enterprise customers to utilize in their mixed reality simulations.
Hardware — I would be remiss if I didn’t mention the hardware. There are plenty of VR devices out in the market. At nearly 6000 US dollars, the Varjo device is out of reach for most customers. However, the devices I saw were sleek, lightweight and did not heat despite being plugged into a USB cable. Apparently, the HMDs have a cooling fan built-in. This last detail may seem minor but is a huge draw for enterprise customers. Imagine a pilot in a training scenario who must regularly remove the HMD due to overheating.
Ecosystem
Varjo has done well to work with several of the leading engines for VR development, including Unity, Unreal and others. This is a great advantage for enterprise customers whose efforts to develop relevant VR content for their internal and business purposes are not limited to any one engine. The chart below captures all the engines they currently work with.
Varjo seems to be leading with a direct to customer go to market strategy, with customers already “in the hundreds”. However, they are not relying on this alone but also building channel partnerships. The best and most recent one to highlight is their recently announced partnership with Lenovo. This is a significant deal for both sides. For Varjo, Lenovo offers global reach, a strong suit of enterprise customers and a dedicated salesforce that would huge as a reseller for Varjo. For Lenovo, partnering with Varjo boosts its fast-growing reputation as a major player int eh AR/VR space. While Lenovo has its own devices and has partnerships with other VR device makers, making their Thinkstations “certified for Varjo” will go a long way towards catering to customer demand at the high end of the spectrum.
The applications are immense in scope and revolutionary
VR and AR technologies have been around for several years but it’s fair to say that they have not yet become mainstream. There have been several constraining factors including the cost of the device, the bulk, the relative lack of content with real-world applicability, lack of silicon to enable smaller form factors, overheating and so on. These constraining factors have been even more true for the enterprise segment. The biggest issue with enterprise applications is that there is little margin for error. Devices need to offer a human-like resolution, eye tracking and very low latency video feeds for mixed reality, on-device or cloud-based analytics and processing, all without the device overheating. This is a tall order but Varjo has come closer than any device I have yet had the chance to experience.
The ability for enterprises to create near real-world experiences through high resolution, eye tracking and video pass-through over innovative HMDs is opening tremendous new possibilities. In the week I have had since getting to play with these devices, I have found myself thinking a lot about possible applications, and there are several.
Telepresence — think about the possibilities for disrupting the telepresence market. Paired with 5G and an edge cloud network, you wouldn’t need expensive equipment and high monthly fees anymore. In fact, this appears to be exactly what Varjo demonstrated in partnership with Finnish CSP Elisa at the Slush event last week. Cisco Telepresence anyone?!?
Training and simulation — I’ve already mentioned the flight simulator and air traffic controller examples. This can also be stretched to training for a driver’s license, especially for commercial operations like forklifts, cranes and other heavy equipment.
Inspections and maintenance — imagine workers on an oil rig doing inspections or needing to conduct maintenance work. The ability to have digital objects overlaid with high-resolution video feeds and the possibility to have audio feeds to advise them through the process. Or an engineer sitting remotely and inspecting several cellular base stations through a mixed reality HMD.
There are so many more possibilities, especially since this is such a nascent and emerging space. I can see possibilities for market research for retail and other industries, advanced engineering, testing, and product design teams in the manufacturing sector; training simulations for the armed forces, virtual tourism, and even VR based therapy sessions. All in all, the possibilities are immense in scope and the way we perceive the world around us is about to be fundamentally disrupted.
How does this relate to the world of Telcos?
Yes, yes, as a telecoms analyst, it must always come back to this angle for me. How will this fascinating world of advanced AR/VR/XR tie into the world of telecoms? Is there a role for the communications service providers (CSPs) in this emerging ecosystem? The short answer is yes. I was on the lookout for a compelling use case for those CSPs who have deployed or are evaluating 5G rollouts and after the Varjo meeting, I was convinced that this is more than a viable use case.
The most immediate impact that a 5G network would have on these cutting-edge devices is to eliminate the need for wires. In the demos that I saw, despite being fully immersed in the scenes, a little voice at the back of my head kept screaming out to me to void tripping over the wires that connected the HMD back to the console running the scenes. At one stage, I got myself entangled in the wires. Of course, this may simply suggest that I am clumsy but a connected device without the wires would have taken the experience to another level. I am sure a CSP offering high-speed 5G connectivity could help in this regard, especially with mmWave spectrum offering high bandwidth and low latency when connected to an edge cloud. AT&T recently demonstrated the possibilities at an event. If this can be offered over a private wireless network, then the performance benefits are even greater.
Going further, the extremely low latency offered by 5G will have a transformative impact on connected, mixed reality experiences that are in demand from enterprises. As I said earlier in the piece, enterprises will thrive in an environment that can closely mimic or even match the real-world environments faced by humans. This requires devices that have a similar field of view (FOV), high-resolution PPI, advanced eye tracking, compute resources and several other features, the sum of which will begin to approximate the human experience. Varjo has made great strides in this direction and I expect them to continue to push the envelope with new innovations for a rapidly growing addressable market. CSPs would do well to pay attention to this space and explore possibilities for collaboration and partnerships. Elisa working with Varjo is a good example of where this space could be headed.