Microsoft, U.S. Army Strike Nearly $22 Billion Headset Deal -- Update
By Sarah E. Needleman
Microsoft Corp. has agreed to build custom augmented-reality
headsets for the U.S. Army in a deal worth up to $21.9 billion,
expanding the technology company's role as a major government
The devices will be based on Microsoft's HoloLens headset that
made its debut in 2016, the company said in a blog post Wednesday.
More than 120,000 units of the custom gear will be delivered over a
10-year period and supported by Microsoft's Azure cloud-computing
service. The headsets will run on Microsoft software and help keep
America's soldiers safer as well as make them more effective, the
company said, in part by enhancing their situational awareness and
providing training opportunities.
The military has long relied on vision-enhancing tools like
night-vision goggles to improve combat effectiveness. But that
advantage has been reduced as such equipment has become more widely
available, adding to a push to find a new technology edge.
In a statement, the U.S. Army called Microsoft an "industry
leader in developing innovative technology" and said its
partnership with the company "illustrates areas that the Department
of Defense and industry can work together toward achieving
modernization priorities in the interest of national security."
CNBC earlier reported the deal's value.
Augmented reality, known as AR, overlays digital content onto a
person's view of the real world. AR headsets have been gaining
popularity as a resource for workers in industries such as retail,
healthcare and automotive manufacturing, especially since the start
of the pandemic. Microsoft competes in the space with several dozen
companies, including Alphabet Inc.'s Google and Magic Leap Inc.
The technology industry considers AR the next major computing
interface. Facebook Inc. earlier this month announced plans to make
AR glasses for consumers and this week "Pokémon Go" creator Niantic
Inc. hinted that it is developing a pair as well.
The Army for years has been experimenting with equipment to help
soldiers be more aware of what's going on when they go into battle,
often in unfamiliar surroundings. The branch of the military sees
AR headsets as a potential way to make sure troops are more aware
of dangers around them, keeping them safer.
Microsoft has a long history of supplying tools to the U.S.
military. In 2019, the company won a landmark cloud-computing
contract with the Pentagon worth up to $10 billion over the next
decade, beating out Amazon.com Inc., which had been widely seen as
the front-runner. Also that year the U.S. government awarded a
10-year $7.6 billion Pentagon contract to General Dynamics Corp.
that included replacing existing IT systems with Microsoft's Office
365. The Marine Corps also has experimented with Microsoft's
The new deal with the U.S. Army comes after Microsoft in 2018
won a $480 million contract to supply it with 100,000 modified
HoloLens headsets. The custom-designed devices will help soldiers
make informed decisions as they confront current and future
adversaries, the Army said. For example, the headsets will feature
night-vision capabilities and allow soldiers to measure the
distance between their current location and their team members in
the dark, according to Microsoft.
Write to Sarah E. Needleman at firstname.lastname@example.org
(END) Dow Jones Newswires
March 31, 2021 20:08 ET (00:08 GMT)
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