Microsoft Awarded a $21 Billion Contract for AR Headsets by the US Army

Microsoft Awarded a $21 Billion Contract for AR Headsets by the US Army

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A contract worth up to $21 billion for augmented reality headsets has been awarded to Microsoft by the US Army. The devices will be custom-designed to help soldiers map the battlefield, pick their targets, and stay clear of the threats by superimposing intelligence information directly onto their field of vision.

The Integrated Visual Augmentation System or the IVAS is a component of the broader set of investments in the direction of making military intelligence data more useful for the soldiers. Most of these innovations that are now being adopted to assist soldiers in making quick decisions in far-flung battlefields were initially developed for enterprises or the commercial world.

Through a release, the Army stated that the IVAS system would help “achieve overmatch against current and future adversaries.” Alex Kipman, an augmented reality technologist, said through a blog post about Microsoft that the program “delivers enhanced situational awareness, enabling information sharing and decision-making in a variety of scenarios.”

The development for IVAS has been going on for several years under an increasingly common contract mechanism called Other Transaction Authority. Such a contract permits military agencies to develop and test new technology by employing a collaborative prototyping process.

Depending on the number of headsets and the associated technology required by the military, the entire project could be worth much less than the $21 billion. The program also has a clause for two five-year increments which gives the Army an option to cut the program short if it is not meeting the objectives.

Over the years, Microsoft has narrowed down its augmented reality business to smaller but customized deals with customers like Japan Airlines that use Hololens to train pilots and Swiss-based Tetra Pak International that uses the tech to assist its representatives for remotely repairing the packaging machines.

Nevertheless, the Pentagon contract represents a new milestone for the company.

“It’s the biggest mixed-reality deal out there,” said Forrester analyst J.P. Gownder. “While the military headset differs from the Hololens that’s available to other customers, it’s based on the same technology and uses Microsoft’s Azure cloud-computer services. The size of the deal, and the imprimatur of the Pentagon as a customer, could spark business from other customers.”

“It’s going to turbocharge interest,” Gownder said.

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