Microsoft Corp announced it had won a deal to sell the U.S. Army augmented reality headsets. Significantly, it is backed by Azure cloud computing services and based on its HoloLens product.
According to the Microsoft spokesman, the contract for more than 120,000 headsets could be worth up to $21.88 bn over ten years.
Notably, Microsoft shares boosted after the announcement. The stock increased by 1.7% to $235.77 per share at the end of the previous session.
The deal indicates the company can make significant revenue from a futuristic product resulting from years of research beyond core areas.
It follows a $480 million contract the firm got to give the Army prototypes of the IVAS in 2018.
Remarkably, the HoloLens costs $3,500. It allows humans to see holograms overlaid over their actual environments and interact using hand and voice gestures. Furthermore, an IVAS prototype displayed a map and a compass and had thermal imaging to identify people in the dark. It could also determine the aim of a weapon.
It enables soldiers to fight, rehearse and train
Alex Kipman, a technical fellow at Microsoft, announced that the headset augmented by Microsoft Azure cloud services delivers a platform that will keep soldiers more protected and make them more effective.
It enables soldiers to fight, rehearse and train in one system. The contract has a five-year base period, with a five-year option after that.
The deal makes Microsoft a stronger technology supplier to the U.S. military. In 2019, the firm secured a contract to provide cloud services to the Defense Department, beating out Amazon, the leader of the public cloud market. Furthermore, Amazon has been challenging the contract, which could be worth up to $10 billion, in federal court.
Alex Kipman reported the headsets are designed to deliver improved situational awareness, enabling information sharing as well as decision-making in various scenarios.
According to the company spokesman, they will manufacture the headsets in the United States.