With a plethora of headset releases and new products entering the market, 2016 was supposed to be “year one” for the virtual reality (VR) and augmented reality (AR) markets. And, it was…sort of.

Despite the hype that came with products like the HTC Vive and Sony’s Playstation VR, delayed hardware releases and a lack of content led some to doubt the technology’s future as a mainstream entertainment experience. However, during 2016 a dark horse use case emerged that could continue to drive development in the space–AR and VR in business.

Despite some market watchers’ assertions that AR and VR technologies are facing weak demand, business leaders see potential in both technologies. According to a 2016 Tech Pro Research report, 67% of businesses are considering using AR in the future, while 47% are considering VR for the future.

SEE: Virtual and augmented reality policy (Tech Pro Research)

A recent report from IDC claims that the combined revenue for both the AR and VR markets will hit $162 billion by the year 2020. To put that into perspective, the revenue for the markets in 2016 is around $5.2 billion. And a big part of that revenue growth will be driven by services related to enterprise applications of the technologies, the report stated.

“AR/VR software revenues will also get off to a quick start, growing more than 200% year over year in 2016, but will quickly be overtaken by services revenues in the middle years of the forecast, as logistics and manufacturing demand enterprise-class support,” the report stated.

Additionally, another one of the major roadblocks to VR adoption–price–will likely begin dropping as well. Research firm Tractica said that it projects headset prices will drop by roughly 15% each year, which could also boost sales.

While VR and AR aren’t currently experiencing explosive growth, 2017 will be a pivotal on-ramp for development necessary to reach 2018, which is when Digi-Capital predicted that VR and AR could reach the next stage of market growth.

While it’s clear that much of the hype around VR and AR came from high-end products like the Oculus Rift, it was basic platforms like Google Cardboard that really democratized the technologies and opened up the possibilities for the enterprise. However, the use of standalone systems seems to be increasing among businesses as well. Companies like Marriott Hotels and BetterCloud, and universities like the Savannah College of Art and Design, are just a few of the many organizations that have begun experimenting with AR and VR, and more will follow.

So, how are businesses using AR and VR? The most obvious use case is virtual product demonstrations and 360 video tours. But, enterprises are also using the tools for training, communication, and prototyping as well.

The 3 big takeaways for TechRepublic readers

  1. Virtual reality (VR) and augmented reality (AR) have been controversial technologies since they saw a revival a few years ago, but businesses and enterprise organizations could be the strongest audience going into 2017.
  2. Enterprise services will help lead the growth of the AR and VR markets, which IDC said will be worth a combined $162 billion by 2020.
  3. Organizations can use AR and VR for training, tours, demos, communication, prototyping, and more.