Microsoft Expects Negative Feedback on Military HoloLens, Email Shows

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  • Microsoft won a contract worth up to $ 22 billion to build HoloLens-like goggles for the US military.
  • The contract has had delays and quality problems amid strategic confusion in its mixed reality unit.
  • A leaked email shows Microsoft expects negative feedback when soldiers test the latest version.

Just two months before the US Army is scheduled to begin real-world operational tests with Microsoft’s HoloLens-like mixed reality goggles, Microsoft is bracing for negative feedback as it presents the military with the latest updates of the device, according to an internal email viewed by Insider.

Microsoft won a contract that could be worth as much as $ 22 billion to build the device – considered a win for the mixed reality unit that CEO Satya Nadella now sees as key to the company’s future – but the contract has been behind schedule and plagued by quality and performance problems. Internally, some close to the project fear the Army will simply walk away from the contract.

On Monday, soldiers will get their hands on the latest version of the device in a testing event called STP5 because it’s the fifth so-called “soldier touchpoint” in an early evaluation phase of the contract. It’s the final such event scheduled before the military is set to begin testing the device in the field in early May. Microsoft is expecting a negative reception due to ongoing problems with the device’s reliability and its performance in low light environments, adding uncertainty ahead of planned operational tests in May, according to the email.

“We (Microsoft) are going into the event expecting negative feedback from the customer,” a Microsoft employee wrote on Thursday in a memo to members of the company’s military contract team, including AI and mixed reality general manager David Marra. “We expect soldier sentiment to continue to be negative as reliability improvements have been minimal from previous events.”

Microsoft spokesperson Frank Shaw said the event is “part of an ongoing process to engage directly with the soldiers to further improve and enhance the device” leading up to May’s operational test.

This deal was considered a major milestone for Microsoft in particular and the augmented reality field in general. While headsets like Microsoft’s HoloLens are widely considered key to the metaverse vision promoted by leaders like Meta CEO Mark Zuckerberg, they’ve turned to find commercial success. Within Microsoft, there’s been widespread strategic confusion in the mixed reality division as talent defects to rivals like Meta, as Insider recently reported.

Microsoft, according to the email, expects soldiers will have negative reactions to the devices ‘ability to perform in low light, and said the devices’ thermal imaging performance is expected to be degraded. The email also states that 34 of the devices being used in the test are unpackaged and have been used by Microsoft employees, while the Army expects for its soldiers to have “properly packaged, clean, unused” units to test.

“Sounds like the Army is coming in with low expectations to which might be advantageous as the expectations / delivery delta might not be big,” the email states.

The soldier testing event comes at a delicate moment for the deal, as Congress recently cut procurement funding for the contract. Earlier in March, Congress put “on hold” $ 394 million from the Army’s request for IVAS procurement funding, leaving only $ 405 million available. Microsoft needed at least $ 604 million to meet the minimum order quantity and recover its costs, according to a person familiar with the contract.

“The funds that Congress has allocated enables us to continue to invest in the program, iterate on the device, and deliver on the Army’s initial order,” Shaw said.

Microsoft’s contract to build augmented reality headsets, called Integrated Visual Augmentation Systems (IVAS) and known internally as “Project Delaware,” was expected by the company to be worth as much as $ 22 billion within 10 years. The contract has contributed to internal turmoil and confusion in Microsoft’s mixed reality unit. Microsoft has scrapped plans for the HoloLens 3, and is exploring a smartphone-connected device in partnership with Samsung and a future cloud-based mixed reality device, as Insider recently reported. The military device itself is internally called “Atlas” and works with a computer strapped to the front of the user and a battery on the back.

Microsoft previously declined to comment on Insider’s reporting related to the HoloLens product roadmap, beyond saying HoloLens remains a critical part of the company’s plans. Microsoft mixed reality boss Alex Kipman rebuffed Insider’s reporting by tweeting, “Don’t believe what you read on the internet,” but did not dispute the details in an internal message to his team, viewed by Insider.

“So depressed, so demoralized, so broken,” Kipman wrote in an internal message on Microsoft Teams viewed by Insider. “I’m sure by now you’ve read or heard about one or two of the Business Insider articles that were published on us. On our private roadmap. On our customers’ confidential data … as a consequence of these articles and these individuals shameful actions, someone from finance already came to me to ask if we should lock down and not share so openly our numbers.Someone from marketing already came to me and asked if we should lock down and not share so openly our roadmap. from our National Intelligence and Security Team has already come to me to ask if we should lock down our IVAS work. “

Are you a Microsoft employee or do you have insight to share? Contact reporter Ashley Stewart via the encrypted messaging app Signal (+ 1-425-344-8242) or email ([email protected]).

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