Microsoft Wins $480M Contract to Provide HoloLens to US Military

Microsoft has won a $480M contract with the US military to provide its HoloLens technology as part of an augmented reality technology package that the Army intends to use for training as well as in combat missions. The contract calls for Microsoft to provide “Integrated Visual Augmentation System (IVAS) prototypes.”

Microsoft’s HoloLens has always been a bit of an odd duck. First released in 2016, it’s an augmented reality headset Microsoft still sells for a cool $3,000. Unlike Google and its ill-fated Google Glass, Microsoft has kept HoloLens firmly positioned as a developer and business option as opposed to quickly pushing the product into the hands of consumers. This has prevented any explosion of ‘Glasshole’-style controversy, but it’s also limited the reach of the hardware and, arguably, any near-term ambitions Microsoft might have otherwise had around augmented reality (or, as Microsoft calls it, ‘mixed’ reality). Obviously, a deal worth this much money is a healthy shot in the arm for the HoloLens team as a whole as well. The stated purpose of the prototype adoption program is to “increase lethality by enhancing the ability to detect, decide, and engage before the enemy.”

“Augmented reality technology will provide troops with more and better information to make decisions,” a Microsoft spokesman told Bloomberg in an emailed statement. “This new work extends our longstanding, trusted relationship with the Department of Defense to this new area,”

Microsoft has reportedly sold ~50,000 HoloLens to-date, which constitutes about half the total number the military expects to buy. The $480M contract also includes additional support and services, as well as what’s almost certain to be additional custom work to turn the hardware into something soldiers could use in the field. In its current form, HoloLens isn’t exactly helmet-friendly. The Army has said it wants the final product to be capable of thermal and night vision, to be capable of measuring various vital signs and overall ‘readiness’, monitor soldiers for concussions, and provide some degree of hearing protection.

How Microsoft employees will react to this news is its own topic of discussion these days. Earlier this year, a group of Microsoft employees published a letter on Medium, asking the company not to bid on the Joint Enterprise Defense Infrastructure (JEDI) contract, over moral concerns that employees were being asked to develop tools that would be used for waging war. In this case, the linkages are even more explicit. JEDI is a program to develop cloud services. This new HoloLens contract directly calls for sophisticated warfighting capabilities to be implemented in hardware with the goal of killing people more efficiently.

Microsoft’s response to its own employees’ concern over JEDI was to promise that individuals who did not wish to work on the project would have the opportunity to transfer to other areas of the company. Presumably, the company will make a similar offer here, especially since this Pentagon contract fundamentally changes the nature of what HoloLens is, at least as far as the employees who will work on the military version are concerned.