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Analysing the HoloLens deal with the U.S. Army

Analysing the HoloLens deal with the U.S. Army

Let’s talk about Microsoft’s $22bn U.S. Army deal with HoloLens. Having worked together several years ago with a smaller contract, the U.S. Army announced that their entire Close Combat Force will be outfitted with HoloLens devices, according to Bloomberg. Think of it as commanders feeding information to soldiers while they are deployed on the field. 

While the three Bethesdas worth of cash is grabbing headlines, there are a few tidbits that I find interesting:

  • The agreement will last for five years, with a possibility to extend another five. How the finances break down is more nebulous, but it’s safe to say the deal is worth billions whichever way it is cut. 
  • The deal includes some Azure cloud services. Between this and the JEDI contract, Microsoft is working with multiple parts of the U.S. Also remember that Azure is a core revenue driver for the company, so we may see more immersive-related content as part of it in the future as it integrates further with Microsoft’s cloud services. 
  • Magic Leap submitted a proposal as well. Winning the deal would have helped the company double down further on its Enterprise strategy. 

It’s highly probable that its interconnected web of services and hardware – HoloLens, Azure, expertise – helped it win the contract, compared to other competitors who might only fill one area sufficiently. It’s also why companies like Microsoft are so important to follow within the immersive space. While Apple is a hardware company attempting to diversify towards services, and VR/AR-specific platforms provide the tools of creation, it’s the synthesis of all parts that puts Microsoft in a strong position.