The National Association of Software and Services Companies (NASSCOM) has today released a study with McKinsey & Company as knowledge partners, titled “Metaverse – Prepare to win”. The report delves into key trends in adoption, potential applications of the Metaverse, and opportunities for service providers to take an active role in this exciting new development.
Metaverse has taken a forefront position with recent technology advancements to potentially become the next evolution of the internet. While the term ‘Metaverse’ has existed for nearly two decades, the novel internet avatar has seen an accelerated development driven by technology revolution, consumer readiness and the rise of consumer-led marketing. Significant PE/VC investments and strong M&A commitments have been announced in H1 of 2022, amounting to > $120 Bn value (based on estimates between Jan-May’22).
Metaverse has many interpretations. However, with growing consensus about the defining characteristics of this technology, Metaverse can be defined as a persistent and immersive virtual world experience with digital-physical fusion that allows interoperability, concurrency and user agency to enhance a user’s ability to meaningfully interact, transact & move virtual identity, assets, and data from one world to another.
While at-scale Metaverse adoption is likely to be 8-10 years away, and majority implementations are at POC or MVP stage, the space is witnessing strong early adoption. Enterprise Metaverse adoption maturity trends are similar to AI trends back in 2017. In a survey conducted by McKinsey & Company, 57% CXOs in 2022 have Metaverse initiatives underway, both long- and short-term, compared to a similar survey conducted on AI adoption maturity in 2017.
Enterprises are starting to implement metaverse use-cases across the value chain. By 2030, sectors such as retail, manufacturing, media, healthcare, telecom, professional services and banking are likely to be major spend drivers of enterprise use cases in metaverse. Emerging use cases in customer engagement, multi-channel customer support and real-time simulations for product designing are gaining traction.
It is also expected to gamify the future of work and workforce collaborations. Several initiatives are underway such as re-imagining learning and development using gamified AR/VR based learning suites with virtual instructors, creating an immersive recruitment and employee onboarding with avatar interaction & networking with employees at job fairs and imagining digital twin offices for employee collaborations and meetings.
However, the technology’s at-scale potential will be determined by factors such as, clarity on RoI, technology & talent readiness, and the ability to address societal concerns. According to an independent study by McKinsey & Company, 30-40% of CXOs surveyed report uncertain returns on their Metaverse investments and initiatives remain experimental. Emerging talent pool in areas of 3D/Technical artists, Motion Designers, Graphics Engineers, AR/VR & Software Engineers, etc, will be key to achieve at-scale Metaverse capability building in future.
Speaking on the launch, Sangeeta Gupta, Senior Vice President & Chief Strategy Office at NASSCOM said, “We are beginning to see more nuanced and thoughtful approach in designing an immersive experience whether it is creating virtualized sales channels with NFTs or digital twins for product designing. The potential of Metaverse technology is transformative, it’s at-scale potential will be determined by its impact on data privacy, inclusion, health and the impact on energy & sustainability.”
For technology service providers to prepare and participate meaningfully with the opportunities presented by Metaverse, the study outlines four key considerations. These include defining a differentiated strategic posture on the Metaverse chessboard, such as, hiring a Metaverse specialist in one or two priority verticals or full-stack Metaverse services provider; investing in client service catalogues with ecosystem partners to enable value creation through differentiated IP; building integrated delivery and talent capabilities across service lines and domains to serve client needs and; Identifying investment themes for internal adoption of Metaverse.
