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The ROI of Quantum Computing
What if there was technology that allows your organization to dramatically speed up its reaction to outside events or to run simulations that your competitors can’t match? What if you could optimize shipping routes in the face of changing conditions, discover new materials, determine option pricing quickly and accurately?
Quantum computing is that technology. It exists today and it is poised to make a profound impact on numerous industries in the next couple of years. Organizations in all parts of the world are assembling teams to explore initial applications of quantum computing, motivated by the understanding that they can’t afford to be left behind. Governments also understand that quantum computing is a strategic technology and are pouring billions of dollars into centers of excellence, research grants, and private/public partnerships.
Where does this speed-up come from? Classical computers use binary bits that take the value of either 0 or 1 at any given time. Quantum computers use quantum bits, called qubits, that can be a simultaneous combination of both 0 and 1. This is where things become interesting. A 10-bit classical computer can hold one of 1,024 values and analyze one such value at a time. A 10-qubit quantum computer can simultaneously hold a combination of 1,024 values and simultaneously analyze these 1,024 potential values. A 20-qubit quantum computer can analyze a million options at the same time. A 300-qubit computer, expected to be available in two years, can examine more options than there are atoms in the universe. Quantum computers thus offer the possibility of an exponential speed-up in processing times.
For instance, consider a UPS track that needs to deliver 100 packages at different locations. What is the optimal sequence of stops? Which sequence is fastest? Which is most cost-effective? Which route has the minimal environmental impact? This optimal route might change during the day with changing traffic or weather conditions. Global shipping companies had to scramble with the Suez Canal was recently blocked. Quantum computers can solve this class of problem (called “the traveling salesperson problem”) very efficiently. If Uber, UPS, or a global shipping company could save, for instance, 15-20% in their transportation costs, it would translate to a formidable competitive advantage with huge bottom-line value. Volkswagen is one company that experimented with traffic optimization.
Another multivariate problem is option pricing. Whether you are trading cattle futures, barrels of oil, or just equity options, their value depends on numerous factors. Analysts create sophisticated models and then run Monte-Carlo simulations to determine the expected value. Quantum computers can do this faster, and potentially also with more variables. The financial implications are obvious. Major financial firms - Visa and J.P. Morgan are two examples - already have quantum teams staffed with highly-trained quantum information scientists to address this kind of challenge.
Drug discovery and research into new materials require simulations that track how atoms and electrons interact with each other. But even the strongest classical computers can simulate only the simplest of molecules. Nobel laureate Richard Feynman famously said, “Nature isn't classical...and if you want to make a simulation of nature, you'd better make it quantum mechanical.” Quantum computers are much more suited to simulating quantum phenomena and are able to analyze much more sophisticated molecules, eliminating a lot of guesswork and dramatically shortening the time to explore new drugs or materials. Roche, for instance, is one company that is exploring the pharma implications of quantum computing. As we’ve learned from recent vaccine development projects, being first with a working product is very lucrative.
Leading analyst firms have also taken notice. Gartner predicted that by 2023, 20% of organizations will be budgeting for quantum computing projects. The Boston Consulting Group estimated in July of 2021 that quantum computing could create value of $450 billion to $850 billion in the next 15-30 years, and that value of $5 billion to $10 billion could start accruing to users and providers as soon as the next three to five years.
Having said that, quantum computers are far from being a panacea. Arithmetic calculations, for instance, are handled much better with classical computers. The same is true for I/O, graphics, and user interface. Running Zoom meetings on quantum computers? Not a great idea. It is likely that at least in the near term, industrial solutions will be hybrid classical/quantum. Just like gaming machines have a CPU and a GPU that collaborate to deliver the best user experience, so would quantum-powered solutions be part-classical, part-quantum. The classical portion would wrap the quantum circuit: fetching the data, feeding it to the quantum algorithm, and then extracting the results and take the next steps.
Companies are already spending close to $40 billion annually on high-performance computing. If quantum computers can perform some of these computations faster - or much faster - there is an opportunity for immediate ROI. Indeed, Bob Sorensen, senior vice president at Hyperion Research said that “Quantum computing is the logical next step for organizations that are leveraging high-performance computing. I believe that quantum computing and algorithms would more aptly be described as quantum accelerators because they can enable organizations across a variety of sectors to benefit from new efficiencies, savings and speed to become more effective and competitive.”
How long before quantum computing can deliver these benefits? There are several ways to measure the capability of quantum machines and a popular measure is the number of qubits (quantum bits). More qubits allow running more sophisticated algorithms with more inputs and more functionality. IBM, for instance, described their quantum computing roadmap showing growth from 27 qubits in 2019 to 127 qubits in 2021 to over 1100 qubits in 2023 - progress that is faster than Moore’s law for classical computers. Such progress would appear to enable numerous applications when coupled with the right software environment.
When would quantum computers achieve true “quantum advantage” - conduct calculations that can never be done by classical computers? Some argue that this does not matter. Hyperion Research is an analyst firm that specializes in high-performance computing. Bob Sorensen, senior VP at Hyperion reported on a survey they recently conducted. He says “More than half of surveyed enterprises said that even a 50x performance improvement would cause them to seriously consider quantum computing...they are not interested in quantum supremacy.”
But for any given organization, learning how to benefit from quantum computers is a process, not an overnight miracle. We often see companies setting up exploratory quantum teams, identifying potential use cases across the enterprise, and then conducting short proof of concepts to validate their assumptions. We help these teams by providing them with a software development platform that helps them quickly turn their ideas into working quantum circuits. Through this process, companies learn to separate hype from reality and gain a better understanding of what is achievable today, what needs to wait a year or two, and what might be a decade away. They also develop their internal quantum expertise so that they are leaders, not fast (or slow) followers.
If you were slow to embrace the Internet, mobile devices, or cloud computing, you put your organization at a strategic disadvantage. We are approaching the point where quantum computing would fall in this category: start learning, or play catch-up for many years to come.
What if there was technology that allows your organization to dramatically speed up its reaction to outside events or to run simulations that your competitors can’t match? What if you could optimize shipping routes in the face of changing conditions, discover new materials, determine option pricing quickly and accurately?
Quantum computing is that technology. It exists today and it is poised to make a profound impact on numerous industries in the next couple of years. Organizations in all parts of the world are assembling teams to explore initial applications of quantum computing, motivated by the understanding that they can’t afford to be left behind. Governments also understand that quantum computing is a strategic technology and are pouring billions of dollars into centers of excellence, research grants, and private/public partnerships.
Where does this speed-up come from? Classical computers use binary bits that take the value of either 0 or 1 at any given time. Quantum computers use quantum bits, called qubits, that can be a simultaneous combination of both 0 and 1. This is where things become interesting. A 10-bit classical computer can hold one of 1,024 values and analyze one such value at a time. A 10-qubit quantum computer can simultaneously hold a combination of 1,024 values and simultaneously analyze these 1,024 potential values. A 20-qubit quantum computer can analyze a million options at the same time. A 300-qubit computer, expected to be available in two years, can examine more options than there are atoms in the universe. Quantum computers thus offer the possibility of an exponential speed-up in processing times.
For instance, consider a UPS track that needs to deliver 100 packages at different locations. What is the optimal sequence of stops? Which sequence is fastest? Which is most cost-effective? Which route has the minimal environmental impact? This optimal route might change during the day with changing traffic or weather conditions. Global shipping companies had to scramble with the Suez Canal was recently blocked. Quantum computers can solve this class of problem (called “the traveling salesperson problem”) very efficiently. If Uber, UPS, or a global shipping company could save, for instance, 15-20% in their transportation costs, it would translate to a formidable competitive advantage with huge bottom-line value. Volkswagen is one company that experimented with traffic optimization.
Another multivariate problem is option pricing. Whether you are trading cattle futures, barrels of oil, or just equity options, their value depends on numerous factors. Analysts create sophisticated models and then run Monte-Carlo simulations to determine the expected value. Quantum computers can do this faster, and potentially also with more variables. The financial implications are obvious. Major financial firms - Visa and J.P. Morgan are two examples - already have quantum teams staffed with highly-trained quantum information scientists to address this kind of challenge.
Drug discovery and research into new materials require simulations that track how atoms and electrons interact with each other. But even the strongest classical computers can simulate only the simplest of molecules. Nobel laureate Richard Feynman famously said, “Nature isn't classical...and if you want to make a simulation of nature, you'd better make it quantum mechanical.” Quantum computers are much more suited to simulating quantum phenomena and are able to analyze much more sophisticated molecules, eliminating a lot of guesswork and dramatically shortening the time to explore new drugs or materials. Roche, for instance, is one company that is exploring the pharma implications of quantum computing. As we’ve learned from recent vaccine development projects, being first with a working product is very lucrative.
Leading analyst firms have also taken notice. Gartner predicted that by 2023, 20% of organizations will be budgeting for quantum computing projects. The Boston Consulting Group estimated in July of 2021 that quantum computing could create value of $450 billion to $850 billion in the next 15-30 years, and that value of $5 billion to $10 billion could start accruing to users and providers as soon as the next three to five years.
Having said that, quantum computers are far from being a panacea. Arithmetic calculations, for instance, are handled much better with classical computers. The same is true for I/O, graphics, and user interface. Running Zoom meetings on quantum computers? Not a great idea. It is likely that at least in the near term, industrial solutions will be hybrid classical/quantum. Just like gaming machines have a CPU and a GPU that collaborate to deliver the best user experience, so would quantum-powered solutions be part-classical, part-quantum. The classical portion would wrap the quantum circuit: fetching the data, feeding it to the quantum algorithm, and then extracting the results and take the next steps.
Companies are already spending close to $40 billion annually on high-performance computing. If quantum computers can perform some of these computations faster - or much faster - there is an opportunity for immediate ROI. Indeed, Bob Sorensen, senior vice president at Hyperion Research said that “Quantum computing is the logical next step for organizations that are leveraging high-performance computing. I believe that quantum computing and algorithms would more aptly be described as quantum accelerators because they can enable organizations across a variety of sectors to benefit from new efficiencies, savings and speed to become more effective and competitive.”
How long before quantum computing can deliver these benefits? There are several ways to measure the capability of quantum machines and a popular measure is the number of qubits (quantum bits). More qubits allow running more sophisticated algorithms with more inputs and more functionality. IBM, for instance, described their quantum computing roadmap showing growth from 27 qubits in 2019 to 127 qubits in 2021 to over 1100 qubits in 2023 - progress that is faster than Moore’s law for classical computers. Such progress would appear to enable numerous applications when coupled with the right software environment.
When would quantum computers achieve true “quantum advantage” - conduct calculations that can never be done by classical computers? Some argue that this does not matter. Hyperion Research is an analyst firm that specializes in high-performance computing. Bob Sorensen, senior VP at Hyperion reported on a survey they recently conducted. He says “More than half of surveyed enterprises said that even a 50x performance improvement would cause them to seriously consider quantum computing...they are not interested in quantum supremacy.”
But for any given organization, learning how to benefit from quantum computers is a process, not an overnight miracle. We often see companies setting up exploratory quantum teams, identifying potential use cases across the enterprise, and then conducting short proof of concepts to validate their assumptions. We help these teams by providing them with a software development platform that helps them quickly turn their ideas into working quantum circuits. Through this process, companies learn to separate hype from reality and gain a better understanding of what is achievable today, what needs to wait a year or two, and what might be a decade away. They also develop their internal quantum expertise so that they are leaders, not fast (or slow) followers.
If you were slow to embrace the Internet, mobile devices, or cloud computing, you put your organization at a strategic disadvantage. We are approaching the point where quantum computing would fall in this category: start learning, or play catch-up for many years to come.
About "The Qubit Guy's Podcast"
Hosted by The Qubit Guy (Yuval Boger, our Chief Marketing Officer), the podcast hosts thought leaders in quantum computing to discuss business and technical questions that impact the quantum computing ecosystem. Our guests provide interesting insights about quantum computer software and algorithm, quantum computer hardware, key applications for quantum computing, market studies of the quantum industry and more.
If you would like to suggest a guest for the podcast, please contact us.
