Mark Zuckerberg has built the world’s largest social network, but that won’t be the end of Facebook (NASDAQ: FB) evolution. Today, the company is also trying to find its way into the corporate market. It has the Workplace platform for companies, a communication tool for teams, and tries to make it the center of a much larger offer.
Workplace is not only available to businesses, but it is also at the center of Oculus for Business, the company’s enterprise virtual reality offering. And with the recent announcement of Horizon Workrooms in VR to collaborate in a professional environment, Facebook is trying to become a must-have business app. The goal is ambitious, but it may not be an easy sale.
What are work rooms?
Workrooms provides virtual conference rooms where people inside or outside of virtual reality can meet and present or collaborate on digital content. Users can import assets such as images, videos, or PDFs. Right now, Workrooms appears to be a standalone app, but that may not be the case as long as Facebook tries to link all of its corporate products.
There are a few likely goals for Workrooms from Facebook’s point of view. One is to create a clear business use case for virtual reality. If businesses want people to meet remotely in a virtual space, why not do so in a platform built natively for the Oculus Quest 2 headset?
The second benefit is that an enterprise use case could help increase consumer adoption of VR. The PC had the advantage of being a working tool – the fact that it entered homes was an ancillary advantage. In short, if Facebook can dominate VR for consumers and businesses, it will likely win the VR market.
Here’s what we know about Oculus in the business and workrooms setting so far.
- Technically, an Oculus Quest 2 headset used for business must be purchased through an Oculus for Business account. Facebook Workplace is required to set up an Oculus for Business headset. So although Workplace and Workrooms are not yet integrated, they depend on each other as part of the business.
- If consumers sign up for Workrooms, it is not linked to Workplace, but rather to a Quest 2 account, which is linked to a Facebook login.
- The company went to great lengths to say that it would not use Workrooms data to serve ads on Facebook or obtain user information. I will come back to this point below, but the fact that Facebook has to point this out is a big reason to be skeptical of workrooms in the corporate world.
Everyone agrees that Workrooms provides a great experience and users can bring in a keyboard and screens from their computer. These capabilities are available on other VR tools, but Facebook is trying to expand VR collaboration to the masses and is using its huge user base as a starting point. If that can connect businesses to Workplace along the way, great.
Will Facebook be ready to disrupt itself?
It’s not often that disruptive technology comes from an industry leader who is disrupted. And this is where I think the story may offer clues as to what to look for as Facebook tries to grow its VR and corporate business simultaneously.
It’s also not uncommon for an industry leader to see disruption coming, only to smell the product they are making for this disruptive new market, as they are stuck trying to keep the products that have made their mark. success in the first place. Here are some examples :
- IBM saw the personal computing revolution coming and invested heavily in building the IBM PC as early as the 1970s. In the late 1980s, it commissioned Microsoft (NASDAQ: MSFT) with building an operating system for his computers, believing that IBM’s name and hardware were more important than the software under development. It was wrong. Microsoft has become one of the most valued companies in the world, while IBM has never reclaimed its leadership position in the PC industry.
- Microsoft then saw the smartphone disruption come before most tech companies, developing Windows CE for devices like the Pocket PC as early as the late 1990s. It followed with the Zune portable digital media player, which was released. initially launched in 2006. Windows Phone followed in 2010. The problem with all of these products was that Microsoft tried to introduce concepts that worked on the PC into mobile devices, and they just didn’t work as well as completely redesigned experiences like the iPhone. It also didn’t help Microsoft make money as an enterprise vendor, as mobile devices were largely purchased by consumers.
- Same Apple (NASDAQ: AAPL) breathed on occasion. He saw the growth of the cloud market coming and launched iCloud in 2011, but never turned that into the kind of powerful business segment that players like Microsoft, Amazon, and Alphabet have done with their cloud efforts over the past decade.
What I’m wondering about this integration between Facebook’s products is whether the company is trying to integrate a social network into newer technologies like virtual reality and virtual collaboration. The tech giants mentioned above have tried to tie their old cash cows to their disruptive efforts, and the results have been moot. If Facebook does something similar, it could hamper this innovation effort.
This space does not lack competition either. Apple is working on VR and AR headsets, Microsoft has the Hololens AR product and some VR headsets it has built with partners, and HTC’s Vive headsets are the current leader in the company.
But beyond all that, there’s another big reason why I think this company is getting into virtual reality and the collaboration might not get the traction that Facebook has hoped for.
Will corporate customers trust Facebook?
One of the challenges in getting a business to sign up for a new service is to give it confidence in security. Businesses want to know their data is safe, and Facebook has a questionable data privacy history at best. He knows it, which is why the company insisted on making it clear in a blog post on the Oculus website:
Workrooms will not use your conversations and work media to inform Facebook ads. The audio content of your meeting is processed on Facebook’s servers but is not stored unless someone records and sends us a clip as part of a report. In this case, we will use the information to take appropriate action and then delete the records. Finally, Passthrough locally processes images and videos of your physical environment from the device’s sensors. Facebook and third-party applications do not access, view, or use these images or videos to target advertisements.
Obviously, Facebook is trying to deal with concerns about data in work rooms, as platform users could send their screens, sensitive documents, conversations, and even their keyboard data to Facebook. It is a sensitive subject, to say the least.
Keep in mind that while Facebook is starting out with the best of intentions, it has changed the rules before, especially in VR. Here are some of the notable promises Facebook and Oculus founder Parmer Luckey made when Facebook acquired Oculus – and how Facebook broke them.
- After announcing Facebook’s acquisition of Oculus, Luckey said customers would never need a Facebook account to access the Oculus Rift. Technically, this was true for the Rift product, but it wasn’t true for VR. Once the Oculus Quest was released, Facebook changed course. Today, you cannot access an Oculus device without a Facebook account.
- Luckey also stated that “We are not going to follow you, do flash ads or do anything invasive.” Oculus announced this summer that it is starting to test ads in VR headsets.
- When acquiring Oculus, Luckey also promised that “competing” apps would not be blocked in headsets, meaning the platform would be open. Today, the Oculus app is highly organized, the number of apps is limited, and most social apps aren’t available through the normal App Store. There are ways to integrate third-party social and business apps into Oculus through sideloading or the new App Lab, but they’re difficult.
Beyond these broken promises, Facebook has a history of scandals like Cambridge Analytica, fake accounts, inflated view metrics, and data hacks, to name a few. In order for business customers to be ready to sign up for Facebook business accounts, they need to be confident that they won’t be followed in one way or another, and that the rules of engagement won’t change at the future. And Facebook may have a hard time convincing them to believe it.
There is a lot of competition in VR
Facebook is clearly betting a lot on virtual reality, and it perhaps sees the enterprise market as the key to developing technology and building critical mass. Businesses are more likely to spend a few hundred dollars on a headset that adds tangible value, and with more businesses having a significant share of their employees working remotely, the demand for meeting space virtual is expected to increase. But Facebook isn’t the only game in town.
Microsoft is a likely competitor with the Teams platform, its own AR and VR tools, and arguably the most critical enterprise software suite. Apple could also enter the market with a headset, and it benefits from a large network of users and corporate customers. There are also well-funded virtual reality software companies like The Wild and Spacial, which are developing collaborative tools and building their ecosystems from scratch.
The company isn’t a sure win for Facebook in VR, and history suggests it will have some stumbles along the way. Only time will tell if the company will be able to reinvent itself and abandon some of the features and tools (like tracking and ads) that have made it successful in social media in order to be successful in enterprise software. . But it’s the kind of transition that has been difficult for tech companies to make in the past.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.