Microsoft's first fully self-contained holographic computer was unveiled in 2015 and the vendor began shipping the first "Development Edition" of its mixed-reality headset, the HoloLens, directly to developers and commercial partners in March 2016.
May 2016 saw the HoloLens headset receive a major software update, and was later patched with the Windows 10 Anniversary Update - its fastest version of the OS so far. HoloLens then became available to buy directly from Microsoft in the US and Canada in August 2016.
Many in the B2B world were left wondering whether Microsoft's most exciting hardware development since the launch of the Surface in 2012 will ever find any relevance among large corporate organisations.
Some reseller bosses voiced their scepticism about whether Microsoft's mixed reality offering will find any use beyond the realm of consumer entertainment.
But according to research house IDTechEx, the market for augmented reality (AR), virtual reality (VR) and mixed-reality headsets is expected to boom tenfold, with sales tipped to hit $37bn (€30.7bn) by 2027.
The research house argues that virtual, augmented and mixed reality will carve a niche among organisations across the education, construction and medical sectors, and adoption will increase as battery life improves and new industry-specific software becomes available to the market.
And now Microsoft has started building an indirect sales channel in Europe for its mixed-reality offering - selecting an initial six partners across the UK, France and Germany last March.
The end of last year saw a trio of high-profile VARs add their names to Microsoft's HoloLens roster. VAR giants Bechtle and Econocom became the vendor's first exclusive resellers in November, while four German partners - IT services heavyweight Axians as well as outfits Holo-Light, ANIMA RES and 3Spin - joined its mixed-reality partner programme in December.
Channelnomics Europe spoke to Microsoft's newly recruited HoloLens partners to find out whether mixed reality presents a genuine opportunity for the channel, and see how the technology has been received by the industry so far.
Econocom, a €2.5bn Belgium-based reseller, is an official "preferred" HoloLens reseller in the UK, France, Italy, Spain, and Benelux but is able to sell Hololens across the whole of EMEA.
Marc Bringuier, international strategic partnership manager at Econocom, said that adoption of mixed reality has grown since it first became available to the market two years ago, as end customers started to take projects to a proof of concept, or even implementation, stage.
Econocom was among 14 European resellers identified by Microsoft as key candidates to build out an indirect channel, according to Bringuier.
"Out of the 14 we were one of the most relevant because we have the European coverage, we have the capability to help end customers buy the devices and deliver training. For us, it is a partnership to leverage the mixed-reality technology. And now we are playing with the ecosystem and approaching the market vertically at a European level," he said.
Bringuier classes HoloLens as a "high-end device" with each unit selling for between €3,000 and €5,000, but stressed that margins made from selling units are inconsequential, with HoloLens being just one part of a digital transformation offering for large customers in verticals such as manufacturing, healthcare, education and retail.
"In markets we can see four big industries. Manufacturing for sure, for design, for on-site assistance, things like that. It is pretty well developed. In Europe, we have education with some UK actors such as Pearson, for example, and our ambition is to partner with local ISVs to build vertical offers. We see a clear opportunity also in healthcare; France made the first surgical operation with HoloLens recently - the first worldwide surgery," he said.
"Manufacturing is currently the most developed vertical where you see the most actors playing. But education and healthcare are moving fast."
The exec said that Econocom is gearing up to make a big announcement this month, when it will reveal 10 new mixed-reality partnerships across its four key verticals.
In the UK, Econocom subsidiary JTRS, which the firm acquired last year, will be closely involved with rolling out mixed-reality projects across the education sector. Traditionally an Apple and Google reseller, JTRS' involvement with HoloLens will bring a new vendor into its stable, according to managing director Tim Morgan-Hoole.
"We've been diversifying our offering through manufacturers and working alongside Econocom UK with existing customers and seeing how we can help them with that localised product supply and support," he said.
"It is like any new emerging technology that comes to us. As more software is developed for it, it starts to open up opportunities that weren't necessarily there before as more software developers see the potential behind it."
Bechtle joins Econocom as Microsoft's second exclusive pan-European reseller of HoloLens. The firm claims that several accounts are piloting more than 200 HoloLens units, and now Microsoft's European stores are linking customers to Bechtle as a commercial partner.
The firm is even offering HoloLens as a leasing or renting option, which it expects will drive further adoption in 2018.
Speaking to Channelnomics Europe, UK MD James Napp said that Bechtle is authorised to sell HoloLens across the UK, Germany, France, Belgium, Austria, Portugal, Italy, France and Ireland. Napp could not share sales numbers, but said that orders have already started to come in from UK customers.
"Microsoft went down the route of specifically selecting a handful of partners, their favourite partners, and we were one of the first selected," he said.
"In terms of what is driving our growth in the IT market, this digital transformation piece is absolutely key."
Microsoft's channel approach
Napp and Bringuier agree that Microsoft's channel strategy around HoloLens has been similar to how the vendor approached the market with the launch of the Surface in 2012. Microsoft is eager to test the waters with mixed reality among a select few resellers before it is rolled out globally.
Claus Romanowsky (pictured), business development manager of digital innovation at Vinci Energies in Germany - the parent company of IT services giant Axians - drew a comparison between HoloLens' and Google's virtual reality offering Google Glass in how Microsoft is approaching the channel.
"Microsoft is quite careful because this is quite a complicated project. Just like with Google Glass, there is a new enterprise version on the market, and there are only a few customers selected to try them because they want to keep it a secret. They do not want to burn the new technology, they want to see if the technology really fits the requirements before they make a big splash, and I think that is the same with Microsoft," he said.
Bringuier said that Econocom has an exclusive contract with Microsoft as a pan-European HoloLens reseller until the end of 2018. There is a possibility Microsoft will choose to extend exclusivity with Econocom into 2019 or even 2020, but Bringuier said he expects Microsoft to open up the technology to more channel partners once more customers adopt mixed-reality solutions.
"If you look in the past, what they have done with Surface, HoloLens is a global project driven by the HQ. They first started to sell HoloLens through the Microsoft store because they wanted to keep an eye on the business and see which end customers are ordering it in order to partner with them and drive the adoption of the technology," he said.
Romanowksy said 30 partners are currently signed up to the programme, but added that Microsoft intends to make a huge push for its mixed-reality platform in the next two years, and around 500 partners will be on board globally by the end of 2019.
He said Axians is looking to extend its involvement on the programme to more countries outside Germany, with the goal of becoming a global partner.
With its pedigree in construction and manufacturing, Romanowsky said Axians' parent company VINCI has already rolled out mixed-reality projects with aeronautical manufacturer Airbus, and is eager to work with the organisation on a global level.
"Mixed reality is an important building block of our digital reality offer… HoloLens especially is an aspect of 3D visualisation, mobility and collaboration, and we see a great potential for our customers," he said.
"Examples would be creating virtual showrooms to present products in a new way to increase sales for our customers, or research and development - as a product designer, you can make your design virtually tangible without making a real prototype. This is a great offer for our customers. 3D visualisation is something that is especially interesting for our customers."
The Axians executive said VINCI is also utilising HoloLens for in-house navigation among its facility management employees. With HoloLens, staff can create a 3D model of a building, which is then installed into the HoloLens headset so staff can easily find specific locations and machinery within a facility without any prior knowledge of the building's layout.
"For an employee who has never been to that facility before, this saves a lot of time," he said. "And you don't have to train that person - you can send almost any employee for the first time to the facility and they can find every location they need.
"We not only talk about the technology but can also show customers some interesting use cases. If you screen the market, you see a lot of nice Microsoft videos, but you don't see a huge amount of use cases."
As HoloLens and Microsoft's mixed-reality platform becomes available on a global level, AR and VR sceptics who dismissed the technology as a mere consumer gadget may find themselves eating their words.
Or as Bringuier puts it: "We see a customer ecosystem that is motivated to being innovative - it is only the beginning of the story."
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