For most of us, the metaverse, a digital world where reality and virtual reality fuse, is a novel concept. But it’s been gaining a lot of traction recently.
Facebook CEO Mark Zuckerberg is one of the big names backing the idea, having recently announced that Facebook would be expanding its horizons to take in all things digital and “effectively transition from people seeing us as primarily being a social media company to being a metaverse company.”
The reason for such shifts lies in the metaverse’s potential. A digital world, it is effectively infinite in scope. Using avatars, individuals can move, meet and consume in it. Companies, and those companies that support their efforts, are looking at this digital world with interest.
Nearshore Americas caught up with Everest Group Partner, Yugal Joshi, to hear about the potential that tech services outsourcers should see in the metaverse as it grows. Joshi, who has spent his 20 year experience engaged with technology services, offered his view on the areas of the metaverse where tech service organizations can hope to profit.
Nearshore Americas: Firstly, what does the metaverse mean and what is its current standing?
Yugal Joshi: The term is very loosely used; anyone can use the metaverse concept and in conjunction with technologies that have been existent for some time like digital twins.
One view says that the metaverse is an entirely virtual world, while the other says it will ‘permeate’ and be moulded to our reality, more like a form of augmented reality (AR). This is already happening in gaming, for example, with haptic suits. The workplace is also seeing this chance with Zoom, which enables a realistic face-to-face interaction.
There is the demand side and the supply side to the metaverse. On the supply side, opportunities are boundless. Gaming companies are building what they term metaverse ‘real estate’ in places like the Hong Kong Sandbox or Ceek, and major retail firms like Nike and H&M have bought ‘stores’ in these virtual worlds.
Aside from gaming companies, Facebook, Microsoft and Nvidia are there representing the enterprise vendor technology perspective. These tech vendors become very large markets for tech service companies. They become a large buyer segment for service providers not only to go to market but by building solutions for them.
Major retailers have already moved into the space and experimented with concepts of metaverse and this means that the learning experience, maintenance and employee training becomes very important for tech service companies
However, there’s a challenge tech service companies must overcome. Historically, tech companies have not often used tech service companies for strategic work; they’ve mainly been used for support, product development or QA purposes. This challenge will be important to overcome for tech service companies as the metaverse grows. A good sign is that tech service companies have ample experience with AR and VR. They also work with device vendors like LG. The software and apps for those devices also need to be built.
On the demand side, major retailers have already moved into the space and experimented with concepts of metaverse. This means the learning experience, maintenance and employee training becomes very important for tech service companies. The ecosystem around the metaverse remains clunky but once the enabling system is in place the process will speed up.
Regardless of the philosophical arguments around what the metaverse actually is, major companies like Facebook and Microsoft provide backing for the concept and opportunities become more serious for enterprise companies and the outsourcing companies that support them.
Nearshore Americas: Which areas of technology services will see demand grow from the metaverse?
Yugal Joshi: It will create a lot of demand for technology service providers in many areas they already work in like engineering, product engineering, as well as contact center companies being needed. The building of the entire metaverse experience, including digital interactive and marketing services, will become very important in bringing these ‘builds’ to life.
To be compelling, the metaverse needs to be a fluid, seamless experience. It isn’t simply about building an app, but building one that is engaging, and backing it with engaging content and then understanding the customer.
Marketing and research possibilities are limitless here too through providing an in-world platform to market brands. Micro-segmentation can be done and brands can engage with target users, having one-on-one conversations.
But the core of this remains technology. The metaverse needs a vast amount of infrastructure to run its many applications, so opportunities for outsourcers are also huge in network management and cybersecurity.
This rising tide is going to take a lot of service vendors with it. But not all, because the success of specific vendors will depend on the competencies they have best suited to the metaverse, and the scale they can work to.
Nearshore Americas: How does the metaverse need to grow before outsourcing companies can think seriously of investing?
Yugal Joshi: Recently, Zoom acquired a virtual events company, Liminal, and Microsoft has created Mesh. But other efforts have been going on for a while. For example, in 2019 Microsoft combined its Azure AI tech with HoloLens to allow a company executive, Julia White, to speak to people on the other side of the world, in their native language, through a hologram of herself. Her words were instantly translated into other languages.
The point is that much of the technology is already there and so it will be very interesting to see how the learning and development, workplace engagement and maintenance services grow in potential opportunities for tech service companies. Content creation is another of interest. These are the low hanging fruits for outsourcing companies, and the areas that are likely to show quick return.
To be compelling, the metaverse needs to be a fluid, seamless experience. It isn’t simply about building an app, but building one that is engaging, and backing it with engaging content and then understanding the customer
Big spenders like banks and financial services or insurance companies are already on the crypto and digital asset bandwagon. These types of companies understand well how digital currencies can be used in real life. They may now want to see what happens in the metaverse.
People point out games like Second Life to say that metaverse won’t work. But those were different times and different technologies with different vendors supporting the evolution. I’d say it is unfair to be either a cheerleader or a cynic of what the metaverse is; there are already venture capital companies backing the idea who are hyping it up.
Each company must make its own decisions around how it will, or will not, invest.
Nearshore Americas: What are the next steps towards metaverse success?
Yugal Joshi: PWC bought ‘a plot in the Hong Kong Sandbox to be able to advise their clients on the metaverse. They said to offer guidance they must first understand what is going on. This demystification of the metaverse will be critical.
This means ‘Metaverse 101’: literally explaining what it is. Afterwards comes the explanation of how companies can use it, examples of use cases, and how to prioritize its potential. Companies do not have unlimited budgets for new, untested areas, and so prioritization and the relevance of the metaverse for each company must be known. The need to map a company’s needs against the current metaverse concept is key, as both will be changing as we move forward. What will happen to both the metaverse and the company in six months, 18 months and give years from now?
Monetization is vital for the success of the metaverse and its involvement in Nearshore. A company may choose to create a virtual version of its contact center in the metaverse where people go talk to agents ‘physically’ rather than on the phone, but that’s another cost item for the company. It will also improve the customer experience, but unless that virtual world helps cross sell or similar, it remains just an additional cost. Monetization methods must be found.