Is Quantum Computing a winner-takes-all opportunity?

By Michael Biercuk

Quantum computing is on the tip of everyone’s tongue these days. Investors, big business, and governments alike are excited by the prospect of realizing new capabilities that are transforming the world from finance to defense to logistics to healthcare.

It’s hard to understand sometimes, but what you really need to know is this: thinking about “quantum computing” should conjure up the same broad picture as “computers”. It could literally reshape the world and everyone’s lives for the better – even in ways we can’t imagine today, just as we could imagine Netflix and Amazon when they first built ENIAC to calculate the trajectories of artillery shells.

Quantum technology is likely to be as transformational in the 21st century as harnessing electricity was in the 19th.

One of the biggest myths surrounding the quantum computing sector is that it is a winner-take-all. This is no more true for quantum computing than it is for a sector as wide as “computing”. Think about the giants of conventional computing: Intel, AMD, Meta, Microsoft, Google, Apple, Dell, Salesforce, Amazon… there have been so many great successes because the field is so wide.

Where does the winner-takes-all mindset come from? I think it’s likely a by-product of the influx of venture capital investment into the quantum sector. The VC economy is simple – invest in a broad portfolio with a small number of big wins. Some companies need to return 100X or more to offset the many total losses and modest wins in the portfolio. (For a nice visual overview of the model, check this out simple explanation from Phil Morle at Main Sequence Ventures).

Of course, these can pay off big wins and have been a key part of the growth of Silicon Valley and the wider global tech sector. But more reliance on the economic model mandate a small number of wins that are too large can cause distortion.

In the quantum computing sector, I think we’re seeing a similar distortion effect on the industry narrative right now.

Regardless of the level of investor interest, the narrative about the emerging quantum industry is somewhat one-dimensional, segmenting it simply between quantum hardware and quantum software, and then suggesting the initial movers in each segment are likely to dominate the sector. A more nuanced view of the quantum industry suggests another path with much broader potential for impact and value capture.

To understand the sector’s value in aggregate, we can align the various players in the quantum industry with the existing strata in the conventional computing and software sectors:

• Teams building quantum computing hardware enable cloud access to their systems, syncing them Cloud Infrastructure as a Service (IaaS)
• Application and algorithm development and tool-focused teams of developers interested in connecting their innovations to cloud-accessible quantum computers, and making them available via the cloud, in analogy with Application Software as a Service (SaaS)
• Q-CTRL is a category defining business pioneering development Quantum Infrastructure Software segment, providing a link between the “bare metal” IaaS quantum processor and the SaaS provider.
• Hyperscalers such as AWS, Microsoft, and IBM are building supporting cloud platforms for end users, aligned with Cloud Platform as a Service (PaaS)

It was immediately clear that greater segmentation offered more opportunities for large-scale success.

But even within each of these segments there are underappreciated opportunities for multiple winners to emerge. Amazon and Microsoft coexist as major cloud computing (PaaS) providers. Dell and Lenovo coexist as server manufacturers (IaaS). Salesforce, Meta, and Netflix all provide application software (SaaS). Juniper Networks, Cisco, and VMWare all provide the critical infrastructure software that makes all other services work. These are all companies worth tens of billions of dollars.

Why is the future of quantum computing any different?

Add to this the general viewpoint of the problem of sovereign technology – where governments pour money into disadvantaged companies to secure local quantum capabilities – and the idea of ​​multiple winners becomes reinforced.

To focus more on one category, Q-CTRL is the first Quantum Infrastructure Software provider to emerge in the quantum industry. By analogy with VMWare, Q-CTRL Quantum Infrastructure Software virtualizes quantum computer hardware, breaking the connection between the characteristics of the underlying hardware and actual quantum computing power. Doing so massively improves showand improve convenience, cost-effectiveness, and hardware cross-compatibility utility for end users and application teams.

Just like conventional infrastructure software, Quantum Infrastructure Software helps other software teams unlock the value of their own IP and increase the value of cloud-accessible hardware infrastructure.

From the start, the quantum hardware team wanted to tackle this challenge on their own. The paradigm of 100% vertical integration in the quantum industry is disappearing for two reasons. First, hardware development requires a specific way of working, and usually teams that are good at building hardware also have to struggle to produce great software. Second, building QC hardware is robust – it is unreasonable to expect all of the innovation in the design, construction, operation and deployment of these state-of-the-art machines to come from a single organization.

The advent of cloud-accessible quantum computers has accelerated this trend, enabling specialist providers to develop and test their technology without the need to also develop the underlying hardware.

Q-CTRL’s main added value comes through such expertise and focus. We operate the world’s largest team of experts in a technical field called quantum control engineering and have turned it into a unique – and transformational – infrastructure software offering. In short, we can make quantum computer hardware do things that surprise even the team building the system.

As with cloud security software, it’s best to leave mission critical tasks to focused teams with specialized expertise. There’s no reason we can’t win together.

The biggest risk we face going forward is that we allow our ambitions to be crippled by a scarcity mindset. Painting a narrative that results in only one or two winners will leave almost any odds on the table.

Michael J. Biercuk is the CEO and Founder of Q-CTRL and Professor of Quantum Physics and Quantum Technology at the University of Sydney.

May 6, 2023