Microsoft wins U.S. Army contract for augmented reality headsets, worth up to $21.9 billion over 10 years

[mood]

Microsoft wins U.S. Army contract for augmented reality headsets, worth up to $21.9 billion over 10 years

 

KEY POINTS

• Microsoft will deliver to the U.S. Army more than 120,000 devices based on its HoloLens augmented reality headset.
• The deal, which could be worth as much as $21.88 billion over 10 years, follows a contract Microsoft received to build prototype headsets for the Army.
• The contract comes a year and a half after Microsoft won a cloud contract from the Pentagon that could be worth up to $10 billion.

 

Augmented Reality headsets by Microsoft
Source: Microsoft

 

The U.S. Army said Wednesday that Microsoft has won a contract to build more than custom HoloLens augmented reality headsets. The contract for over 120,000 headsets could be worth up to $21.88 billion over 10 years, a Microsoft spokesperson told CNBC.

 

Microsoft shares moved higher after the announcement. The stock was up 1.7% to $235.77 per share at the end of Wednesday’s trading session.

 

The deal shows Microsoft can generate meaningful revenue from a futuristic product resulting from years of research, beyond core areas such as operating systems and productivity software.

 

 

It follows a $480 million contract Microsoft received to give the Army prototypes of the Integrated Visual Augmented System, or IVAS, in 2018. The new deal will involve providing production versions.

 

The standard-issue HoloLens, which costs $3,500, enables people to see holograms overlaid over their actual environments and interact using hand and voice gestures. An IVAS prototype that a CNBC reporter tried out in 2019 displayed a map and a compass and had thermal imaging to reveal people in the dark. The system could also show the aim for a weapon.

“The IVAS headset, based on HoloLens and augmented by Microsoft Azure cloud services, delivers a platform that will keep soldiers safer and make them more effective,” Alex Kipman, a technical fellow at Microsoft and the person who introduced the HoloLens in 2015, wrote in a blog post. “The program delivers enhanced situational awareness, enabling information sharing and decision-making in a variety of scenarios.”

 

The headset enables soldiers to fight, rehearse and train in one system, the Army said in a statement. The contract, which was awarded on Friday, has a five-year base period, with a five-year option after that, an Army spokesperson told CNBC an email. The Pentagon did not immediately respond to a request for comment.

 

The deal makes Microsoft a more prominent technology supplier to the U.S. military. In 2019, Microsoft secured a contract to provide cloud services to the Defense Department, beating out Amazon, the leader of the public-cloud market. Amazon has been challenging the contract, which could be worth up to $10 billion, in federal court.

 

Some Microsoft employees asked the company to hold off on submitting for the cloud contract, and similarly, a group of employees called on Microsoft to cancel the HoloLens contract. “We did not sign up to develop weapons, and we demand a say in how our work is used,” the employees wrote in an open letter regarding the HoloLens contract.

 

Days later, Microsoft CEO Satya Nadella defended the Army augmented reality project, telling CNN that “we made a principled decision that we’re not going to withhold technology from institutions that we have elected in democracies to protect the freedoms we enjoy.” The Army, meanwhile, has suggested the augmented reality technology could help soldiers target enemies and prevent the killing of civilians.

 

-- CNBC’s Amanda Macias contributed to this report.

 

 

Source: Microsoft wins U.S. Army contract for augmented reality headsets, worth up to $21.9 billion over 10 years

[vitorio]

 

 MICROSOFT WINS $22 BILLION DEAL MAKING HEADSETS FOR US ARMY
Microsoft won a nearly $22 billion contract to supply U.S. Army combat troops with its augmented reality headsets.
Microsoft and the Army separately announced the deal this week.
The technology is based on Microsoft’s HoloLens headsets, which were originally intended for the video game and entertainment industries.
7

 8 Pentagon officials have described the futuristic technology — which the Army calls its Integrated Visual Augmentation System — as a way of boosting soldiers’ awareness of their surroundings and their ability to spot targets and dangers.
Microsoft’s head-mounted HoloLens displays let people see virtual imagery superimposed over the physical world in front of them — anything from holograms in virtual game worlds to repair instructions floating over a broken gadget.
The Army’s website says soldiers tested the gadgets last year at Fort Pickett in Virginia. It said the system could help troops gain an advantage “on battlefields that are increasingly urban, congested, dark and unpredictable.”
The Army first began testing Microsoft’s system with a $480 million contract in 2018 and said the headsets could be used for both training and
in actual battle. The new contract will enable Microsoft to mass produce units for more than 120,000 soldiers in the Army Close Combat Force. Microsoft said the contract will amount to up to $21.88 billion over the next decade, with a five-year base agreement that can be extended for another five years.
It’s not clear how it corresponds to the $740 billion defense policy bill that Congress passed in January after overriding a veto by President Donald Trump. The bill affirmed a 3% pay
raise for U.S. troops but included cuts to the headset initiative.
Sen. Jack Reed, a Rhode Island Democrat who leads the Senate Armed Services Committee, said that the technology is promising but its results must be closely tracked “and it’s our job

 

 

source: @pedr666 magazine post

 

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