Software major Infosys recently unveiled Metaverse Foundry, where it has developed over 100 use cases to help clients navigate this new and ground-breaking technology. Metaverse, put simply, is touted as the successor to the mobile internet, a virtual, immersive environment where you can be present in your digital avatar and interact with other people’s avatars.
Moneycontrol caught up with Infosys president Ravi Kumar S, to understand how Metaverse Foundry reached a tipping point so quickly, the revenue opportunity Infosys sees here and uncertainties around regulation and security.
While metaverse as a concept has existed for a long time, why are companies investing so much in it all of a sudden? What opportunities do you see here?
Metaverse has been in existence for 30 years actually, and in some ways, it was ahead of its time when the Second Life (online video game) founder (Philip Rosedale) built the original Metaverse in 2003. What happened in the last 20 years has intrinsic meaning as to why there is a steep curve now on the metaverse than ever before. This includes advances in chip, gaming, and 5G.
What is also important is Web 3.0 technologies, and decentralisation of the web, which is going to happen for sure, is an important aspect around it.
It is important because the centralised web has served the purpose of engaging communities. But it hasn’t served the balance between the providers and creators. There are challenges in our data controls since we are living in an attention economy, which means that if you are on a social platform somebody is capturing the data and using it for advertising and promotional activities. So I think the metaverse is kind of a reset to building the next version of the internet in 3D, which is more balanced between creators and providers. I think the real big inflection point has been the social forces that have catalysed during the pandemic. Also, in some ways we are entering the post-pandemic era where we probably want to live in the hybrid of the physical and virtual worlds. This is where you will find a new three-dimensional internet with business information, communication tools, immersed and potentially interoperable together. The reason why we came up with the concept of Metaverse Foundry is that while some consumer businesses know what the use cases are, a large number of our clients are curious. So the Foundry is this experimental infrastructure where you can discover, create and scale.
But one thing is for sure, metaverse is beyond the buzzword today.
Could you share more on what Infosys is doing in this, and things you are working on in this space?
We have over 100 ready-to-apply use cases and templates, where you could discover, reuse some of those components and connect to the metaverse using the platforms of Infosys. We have something called the XR platform, which has reusable assets and has been investing in AR (augmented reality) and VR (virtual reality) technologies for the last few years. We have the skills, like Unity and Unreal, which will help us build things in the metaverse. Once you discover and create, we are hoping that you (clients) will scale with us. Therefore, we have the opportunity to help you scale that infrastructure over a period of time. We also have the NFT (non-fungible token) platform, which is at a very early stage. The idea of the NFT platform is that users can submit their content, create tokens and then exchange. We have a blockchain where you could do proofs of concept. For instance, in sports, with the Australian Open and Roland-Garros, where we have actually created a virtual world where you can buy things around tennis and bring them to the real world where you see the match or bring the immersiveness of the stadium into the living space, which sometimes will be better than seeing it in the stadium.
We have one other thing, which is digital twins. In manufacturing or other places where there is a physical manifestation, you could actually bridge (the physical world with its digital twin in) the metaverse so that you could simulate. On the Infosys XR platform, we created a digital twin of a vaccine lab so that engineers could access vaccine culture data and make predictions and decisions.
So far the most popular use cases we have seen are reimagining the shopping experience and the future of the workplace. Is that where you see traction picking up first?
There are many large enterprises that have announced their presence on the metaverse. If people are not going to come to the McDonald’s physical store for a burger, they should at least be able to order a burger from the metaverse. So I think shopping is probably at the top of the list in terms of how quickly it will get absorbed. Remember, this whole birth of the metaverse has come from gaming, which is very consumer-led. So gaming, shopping, and retail will be the top verticals where the cycle of discovery, creation and scale will be much quicker. The ones where you will find significant value over a period of time are digital twins. Automotive companies are talking about creating digital twins on the metaverse, consumer goods companies are talking about co-creating and innovating on the metaverse, which does not happen in the Web 2.0 world.
Co-creating at scale can happen on the metaverse with Web 3.0 technologies because you could create a decentralised ledger without taking away the data. Those are the ones that will take longer but will have much more value.
We will see the version of the metaverse evolve over a period of time. But we are on that runway and catching that runway through this Foundry so that our clients can be on the runway ahead of their peers.
How big of an opportunity is it? JPMorgan Chase in its report said that it is a $1-trillion opportunity.
The numbers are anybody’s guess. As I said, we are at the steepest part of a curve and we will take off from here. But as it takes off, there are many things in the mix we all have to think about. I’ll give you two examples. I spoke about the disgruntlement of communities. That is a big change, which means the participants and creators have an equitable role in the space, which is what gaming companies are doing. They are actually taking the proceeds and giving back to the creators. The second big thing is, ‘Why do you want to be in a cyber-connected world? Isn’t there digital fatigue? What happened to digital minimalism?’ People are going to ask that question. In the metaverse, the privacy standards are very different. Because even if you move there, there is going to be a digital record. So with all that happening, people are going to ask, how much time am I going to spend in the virtual world? Would it be more inclusive than the real world and would I want to spend more time there? So these are very important social questions people have to ask. I don’t want to put a number on it because it will do a disservice to it. But I’m giving you the factors that will determine if we will get there or not.
What is the kind of investment you are making to go after the metaverse opportunity?
There’s no silver bullet in the metaverse. We are adding complex skills related to gaming such as Unity, CAD tools, and open-source frameworks. These are things we invested in. In fact, we have a team of 400-500 people focused on those kinds of capabilities.
That is how we are approaching this to stay ahead of the curve. Building the engineering skills, capacity to scale, use cases we are building, and investing in huge partnerships. Of course, we are investing heavily in proof of concepts and co-creating the clients. We have something called the virtual living labs, which we built over the last two years, and we are bringing all this into it so that our clients can actually experience it. In fact, one of our clients actually wants virtual living labs as a service. This means they wanted their physical products to be presented in virtual living labs and 3D models. It is an evolving space, and it needs the breadth of capability to get there.
Can you quantify the investments you are making?
I will not be able to put a number on this. Because we are just doing this with a set of things we have already done. Remember, this is not the end state.
If you are already working with clients, can you share more on the nature of these deals and the structure you are seeing?
This is still not going to contribute to a large deal yet. We are still experimenting and playing with it. A lot of metaverse in production is in retail, shopping, gaming and that kind of stuff. But the real ones like digital twin, education and workplace are still not produced as much. I think many of our clients will look for outcome-centric deals. I do think there will be some IP (intellectual property) play because you build things around it and it is evolving. Those 100-plus ready-to-apply use cases will play a big role. These are new opportunities, so there will be a fair bit of discretionary spending. But it’s too early to call them and say that these will be like large deals in the next quarter. It will take us some time to get there. But I would say if I have to pick one industry which will be the fastest to get there, it will be retail.
Is this also a big opportunity in banking and financial services, which is one of your largest verticals? We are also seeing banks getting on to the metaverse themselves. For instance, JPMorgan Chase launched its metaverse lounge on virtual browser-based platform Decentraland, recently.
Banking and financial services are the underpinnings of a transaction that happens either in the physical world or in the personal world. So we are going to find a lot of activity attached to cryptocurrencies, NFTs, and the ability to create a financial system in the virtual world, where buying and selling are going to happen. This is going to happen in a more immersive way. If retail picks up, there is no reason why financial services won’t.
Also, I have not spoken about some of the other industries. Take healthcare. We have AI (artificial Intelligence) tools that can actually read your scan and X-ray better than a human being. So I think we are underestimating how much the world has changed. You had asked me this one pointed question about what has triggered the metaverse this much? It is the social practice attached to what we went through in the pandemic. That will be the single biggest reason why there is this talk about the metaverse so much more than before. Of course, when two big players announce something, that kind of catalyses it. So I would say financial services is going to be a pivotal foundation in the economy we build the metaverse.
During the conversation, you spoke about education as a use case for the metaverse. Infosys is known for the training you impart on the Mysuru campus. Though due to pandemic some part of the training has moved virtual, are you looking at moving the training to the metaverse?
A part of our training is already virtual for graduates all over the world, including, in India. But the physical manifestation of training is always important. I don’t think we will all move to the virtual world and ignore the real world. That’s not what happens. We will be immersed in the virtual world to make our real-world experiences better. That’s how I see it. So our training has already moved into Meridian, which is a three-dimensional platform. We are taking more things now (like) Infosys Wingspan, which is an equivalent of LEX (training platform) for our clients and making it much more immersive. So I would say education is a real opportunity in the short term. There is no doubt in my mind. For education and edtech, it is a big opportunity.
Even as the metaverse has become big, the regulations are yet to catch up. There are several concerns around this…
Yes, absolutely. There are cyberattacks on your avatars in the metaverse. So where is the regulation? Where is the governance? What are the rules of the game? Who will govern? All that is important and there is so much to watch. So there is no reason for me to believe that this is already done.
But remember, the hockey stick happened in Web 2.0 technologies between 2007 and 2011. The number of people who got onto the internet, I call it the second birth of the internet when the mobile phones came in, was so nonlinear. It grew in leaps and bounds, and we couldn’t comprehend how fast it came. There was a stat that says that 350,000 websites were created every day in that period. So we underestimate the speed at which it will come. We overestimate the pace equally. That’s why I said we’re at the steepest part of the curve to take-off.
But how concerning is it going to be? Regulation is yet to catch up, and scams/cybersecurity attacks in Web 3.0 are already worrying. As this gets into the corporate world, you are going to be dealing with the sensitive data of your clients. Has it become too big too soon?
Cyber security and privacy are going to be very important as we go ahead with this. You can’t take it away. It’s going to be a very critical part. That is why system integrators like Infosys will handhold customers and navigate that journey. We have heavily invested in cybersecurity offerings as well.