Recently, I co-founded Augmentir with three key executives from my prior start-up, ThingWorx, and have been exploring Enterprise AR. ThingWorx was the company that created the Industrial IoT application platform category and was arguably the most successful start-up in the IIoT space, getting acquired by PTC in early 2014. The acquisition of ThingWorx was the […]
Recently, I co-founded Augmentir with three key executives from my prior start-up, ThingWorx, and have been exploring Enterprise AR. ThingWorx was the company that created the Industrial IoT application platform category and was arguably the most successful start-up in the IIoT space, getting acquired by PTC in early 2014. The acquisition of ThingWorx was the first, non-distressed acquisition in the space and directly led to the wave of acquisitions that have reshaped the IIoT landscape.
Prior to founding Augmentir, I did a fairly deep dive into the marketecture of Enterprise AR and found that it reminded me of the early IIoT space — fragmented with lots of companies occupying niches:
- Custom solution builders around Smart Glasses
- Vertical Solution Builders
- Smart Glass vendors
- Technology providers
- And more
Gartner’s recent release of the IIoT “Magic Quadrant” was both reaffirming and disappointing. It was personally reaffirming to see that ThingWorx, under the leadership of Jim Heppelmann, CEO of PTC, occupies the “Most Magic” position in the IIoT space. However, it was disappointing to see that after ten years, the IIoT space has not yet “crossed the chasm” as evidenced by the fact that no vendor is in THE Magic Quadrant.
Why would IIoT, a space that has so many compelling ROI stories, still be stuck between early adopter and mainstream? I have a point of view on this — while IIoT solutions can be extremely valuable and transformative, they have to be easy to own in order to achieve mainstream adoption. IIoT is anything but “easy to own”: this starts with the high friction, traditional enterprise sales process, long pilots, expensive, “Value-based” pricing, long, risky implementation cycles, and vendor lock-in/high switching costs. This makes it hard for even large enterprise businesses to fully adopt, and given these dynamics, it’s easy to understand how Small and Mid-sized businesses have been essentially locked out of the IIoT opportunity.
Unfortunately, in Enterprise AR I see the same dynamics unfolding. High friction sales and POCs, combined with long implementation cycles and high prices, will keep Enterprise AR mired in the early adopter phase. Already, sales of Smart Glasses for the enterprise are hugely disappointing, signaling that the market is unfolding much more slowly than analysts have projected. This will disappoint many investors and dash the hopes of many startups who believe in market projections, not realizing that they are a key part of the problem.
Certainly, we need a new direction if Enterprise AR has any hope of ever crossing the chasm and achieving mainstream adoption.
