Microsoft in 2021 signed a $22 billion deal with the US Army in an agreement that requires the army to buy the upcoming AR headsets. This project was not a ‘coolest technology development project’; the aim was to fabricate a state of the art helmet named Integrated Visual Augmentation System (IVAS) based on Microsoft’s HoloLens technology. The intention was to increase the soldiers’ perception, to make them more effective on the battlefield, and make them think quicker. But they never thought it would not be easy sailing from here onwards, and now the army has a new problem—the headsets cost too much!
The iVAS Headset – The Pains of Spending
The Army had wanted to procure as many as 121,000 of these ultra-modern goggle eyes if they will pass the tests that should be completed by mid-2025. The good news is that, compared to the previous trials, the latest trials are doing better. Doug Bush, the Army’s acquisition chief, said that many of the initial problems were solved also.
But there’s a catch: The material suggests that the retail price of each headset to be around $80,000. And it is now making the Army lift their eyebrows because they require a “substantially lower price” to proceed with such a project.
Breaking Down the Price Tag
The headset itself costs approximately $ 42,000 to manufacture.
So what’s with the extra expense?
There are so many things to consider – program management, labor, and software support. It is not easy to decide where to make savings, said Microsoft’s mixed reality VP Robin Seiler.
She compared it to a complicated puzzle: This really means that they have to look at all facets of the components and all possible labor considerations as well as the flow through supply chains to look for savings.
And let’s be honest: this is not a typical “bulk discount” scenario. You can imagine, when handling military equipment, the difference between one screw and the new update for the software!
This is not the first time the IVAS program has come under fire over the cost of such an offering. Going back to 2022 when the Department of Defense (DoD) expressed prospects that the whole project might lead to the wastage of approximately $22 billion. And what’s worse? Many had questions as to whether soldiers would want to even use the thing out at the front lines!
There were plenty of grievances from soldiers relating to previous models. They complained that it was too heavy, uncomfortable, and even dangerous – here’s a headset caught in a light source displaying your position to the enemy! For example, one of the testers was quite succinct: “These things would have gotten us killed.” And that is not exactly saying it in a very positive way.
Congress also killed a $400 million request for procurement of 6,900 of these headsets in 2023, the Army had to tell Microsoft, “Try again.” They didn’t simply tell the tech giant to make the design better; they provided them with $40 million to do so.
What’s Next?
Microsoft HoloLens 2 production ceased some time ago but they continue to claim full support for the IVAS program. They are now struggling to reduce cost, yet retain quality. It’s kind of a see-saw for both Microsoft and the Army—Microsoft needs to make money, while the Army is trying to avoid overspending.
Final Thoughts
Soldier complaints, stalling and now cost are what IVAS program has been which could have been a ride all along. But the Army isn’t giving up just yet, and neither is Microsoft. Mutually both parties aim at a resolution that will not give a big hit on the government’s purse.
For the moment that shows that everybody has to wait and see if Microsoft has the possibility to take off some zeros off the price tag. If they do it then the Army can use those futuristic headsets while hunting, which the Army really wants, all without having to sell other equipment for this one.
