state of the art

To most people, the words virtual reality conjure up visions of futuristic flight simulators or violent games with goggles and gloves. Entertainment-related applications do indeed occupy the major portion of the estimated $200-million virtual-reality marketplace, according to 4th Wave, a VR-market-research firm in Alexandria, Va. Yet there is a growing band of entrepreneurs who are pushing the envelope of cyberspace beyond electronic amusement and into commercial and industrial applications. Those start-ups operate on the premise that virtual reality enables people to interact with computer-generated information in more efficient and effective ways -- by making the experience multisensory, with the addition of sound or touch. So far, those VR pioneers have managed to attract more hype than capital. "Virtual reality has a ring to it; in the general-consumer community it clearly sparks interest, yet in the investment community it's a taint," observes John Fisher, a venture capitalist with Draper Associates. VR-market researcher John Latta agrees: "What I've seen is demo, demo, demo."

Below are three VR companies venturing into business applications:

* * *

"VR itself does not sell," concedes Robert Jacobson, CEO of this two-year-old VR-design firm. "We use VR principles to develop products that people already recognize." Cofounder and former associate director of University of Washington's VR-research-and-development lab, Jacobson set out to launch a VR business that would "de-emphasize encumbering gear and create a natural environment in which people can work." Privately funded with $300,000, and staffed with VR enthusiasts Jacobson found over the Internet, Worldesign uses video projection screens, surround-sound technology, and networked workstations to create booths that surround the user on three sides and function as interactive theaters. The booths enable viewers to call up spreadsheets and text relevant to what is portrayed on the screen -- and are targeted at customers who work with geographic data, such as utilities, urban planners, and natural-resource managers. Jacobson's five-year plan is to grow a $30-million company.

* * *

Prairie Virtual Systems
John Trimble is one employer who's unequivocally in favor of the Americans with Disabilities Act of 1990. In fact, last year he launched a company that develops VR technology to assist clients with ADA compliance. Privately funded Prairie Virtual Systems' first product is the Barrier Free Design System, a customized software package that has been dubbed "wheelchair VR" because it enables architects, designers, and facility planners to maneuver around in a proposed space as if they were in wheelchairs. Trimble is quick to point out that the system uses a real, as opposed to virtual, wheelchair, which is hooked up to a computer. Users wear helmets and gloves that enable them to see and "feel" their way around the 3-D images displayed on their screens. The program helped architects designing a 140-room hospital realize that the countertops in their bathrooms stuck out two inches too far for wheelchair-bound patients to use the sinks. Prairie's second product is a VR system called the Virtual Workstation, which enables users to design ergonomically correct and user-friendly office space. The company's five-year revenue projection is $100 million.

* * *

Scotts Valley, Calif.
"We're a little bit different from other VR start-ups," says Pin Fong, CEO of Xtensory, which was spun out of Digital Equipment's VR lab two and a half years ago. "Before we started, we asked ourselves, 'What, exactly, can you use VR for that is not entertainment related?" Xtensory creates a variety of industrial hardware and software tools and provides VR consulting services. It has created applications in VR systems architecture and financial modeling and is best known for its expertise in tactile feedback. For example, the company has demonstrated an application for the navy that enables operators of unmanned submarines to "feel" what the vessels' robotic arms encounter in deep-sea exploration. "If you don't have any sense of touch, you can easily crush something," says Fong. Fong says Xtensory has been profitable from day one and projects that the company will reach revenues of $20 million in five years.

-- Alessandra Bianchi