Military Applications Archives

Microsoft’s big defense contract that looks to supply the US Army with modified HoloLens AR headsets isn’t going so well. As first reported by Bloomberg, the Senate panel that oversees defense spending announced significant cuts to the Army’s fiscal 2023 procurement request for the device.

Microsoft announced last year it had won a US Army defense contact worth up to $22 billion to develop an Integrated Visual Augmentation System (IVAS), a tactical AR headset for soldiers based on HoloLens 2 technology.

Now the Appropriations Defense Subcommittee announced it’s cut $350 million from the Army’s procurement plans for IVAS, leaving around $50 million for the device. The subcommittee cites concerns based around the program’s overall effectiveness.

Concept testing in 2019, Image courtesy CNBC

“The Committee remains concerned that IVAS continues to face software, hardware, and user-acceptance challenges that the Army has not sufficiently addressed,” an official statement reads, which was obtained by Breaking Defense. “While the Committee was encouraged by the Department of the Army’s 2021 decision to extend testing and evaluation for an additional 10 months, it notes that significant development challenges with IVAS 1.1 remain.”

Earlier this year the US Congress froze $394 million from the Army’s IVAS budget, which Business Insider noted at the time would only leave around $400 million. Even then, that was allegedly $200 million short of what Microsoft needed to recuperate development costs.

Instead the US government appears to be reallocating the 2023 funds to support procurement of the Army’s Enhanced Night Vision Goggle-Binocular, increasing that program’s budget by $300 million.

The subcommittee also increased spending on a number of other Army programs, including ground vehicle procurement, Abrams tank upgrades, Stryker upgrades, new Armored Multi-Purpose Vehicles, and approved budgets for both AH-64 Apache and UH-60 Black Hawk helicopters.

Business Insider reported earlier this year that Microsoft had internally expressed low expectations for its latest version of IVAS, which was set to begin real-world operational tests in May.

This follows reports that cast doubt on a prospective HoloLens 3 amid an internal division that may have hobbled the company’s efforts to release its next AR headset as planned.

Microsoft is supposedly gearing up to field test its HoloLens-based military AR headset, however a new report contends the company is bracing for impact, as it’s expecting negative feedback from soldiers.

Last year, Microsoft announced it had won a United States Army defense contract worth up to $22 billion which would see the development of a so-called Integrated Visual Augmentation System (IVAS), a tactical AR headset for soldiers based on HoloLens 2 technology.

A Business Insider report, citing a leaked internal email, maintains that Microsoft has low expectations for its latest version of IVAS, which is set to begin real-world operational tests with the US Army in May.

Prototype testing (2019), Image courtesy CNBC

Microsoft’s IVAS contract has allegedly seen delays and quality problems. A separate Business Insider report from last month alleges its enterprise-focused HoloLens 3 may also be at risk due to internal issues within Microsoft’s mixed reality division surrounding whether HoloLens should serve consumers or continue courting enterprise companies.

A purported Microsoft Teams message from Mixed Reality division head and HoloLens co-inventor Alex Kipman paints a pretty depressing story:

“So depressed, so demoralized, so broken. I’m sure by now you’ve read or heard about one or two of the Business Insider articles that were published on us. On our private roadmap. On our customers’ confidential data … as a consequence of these articles and these individuals shameful actions, someone from finance already came to me to ask if we should lock down and not share so openly our numbers. Someone from marketing already came to me and asked if we should lock down and not share so openly our roadmap. Someone for from our National Intelligence and Security Team already came to me to ask if we should lock down our IVAS work.”

Kipman rebuffed the previously report of unrest, saying “don’t believe what you read on the internet.”

It’s said that soldiers may take issue with the device’s low light and thermal imaging performance, and that user impressions will “continue to be negative as reliability improvements have been minimal from previous events.”

That $22 billion is an upper target and not the full amount granted to Microsoft at present. And it seems confidence in the project isn’t very high at the moment, as US Congress has allegedly frozen $394 million from the Army’s IVAS budget, which Business Insider notes leaves only $405 million—around $200 million shy of what Microsoft supposedly needs to recover development costs.

Additionally, it’s also said some close to the project fear the Army will simply walk away from the contract.

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