Quick Quantum Quips: Vendors roll out software applications to increase customer connections through partnerships and internal innovation

Welcome to TBR’s monthly newsletter on the quantum computing market: Quick Quantum Quips (Q3). This market changes rapidly, and the hype can often distract from the realities of the actual technological developments. This newsletter will keep the community up to date on recent announcements while stripping away the hype around developments.

For more details, reach out to Stephanie Long or Geoff Woollacott to set up a time to chat.

July 2020 Developments

Tying systems and software together has been a general focus of July quantum computing activity. These ties increase quantum computing vendors’ ability to more adequately address and meet the emerging needs of their customers. The finance and banking industry remains a key customer base for quantum as more financial customers partner to develop industry-specific applications for the technology.

  1. Cambridge Quantum Computing (CQC) and IBM partnered to make CQC the first startup-based hub in IBM’s Q Network. This move grants CQC cloud-based access to IBM’s army of 20 commercially available quantum computers. Leveraging this cloud-based access and Qiskit, CQC along with members of its hub will work on advancing quantum capabilities for specialized use in areas such as chemistry, finance and machine learning.
  2. D-Wave has expanded its Leap quantum cloud service into India and Australia, increasing the global footprint of its quantum technology. D-Wave’s quantum cloud service is now available in 37 countries. In addition to the Leap Quantum Cloud Service, customers in India and Australia will now also have access to D-Wave’s Hybrid Solver Service, Integrated Developer Environment and Problem Inspector solutions as well as access to flexible increments of computing time in a hybrid computing model. D-Wave offers this flexible access in free and paid plans.
  3. Atos unveiled its Quantum Annealing Simulator, which is compatible with Atos’ Quantum Learning Machine and enables the company to provide customers with access to quantum capabilities via a simulator as well as gate quantum computing through its existing portfolio. TBR believes this approach is strategically advantageous for Atos, as quantum annealing gives customers access to a quantum-like solution that achieves a lower error rate faster than a traditional system, enabling Atos customers to become familiar with the technology while the system developments continue to reduce error rates and expand capabilities.
  4. Atos also unveiled an open innovation accelerator program — called Scaler, the Atos Accelerator — which is geared toward vertical-centric experts and startups. As part of this program, 15 startups and vertical-specific experts will be selected annually to participate in developing quantum-specific projects fueled by customer interest. The research will further support the development and enrichment of Atos’ existing quantum computing offerings and also reinforce, in TBR’s view, Atos’ ability to provide quantum services. TBR notes that this approach to innovation is similar to that of other services firms involved in quantum computing, where innovation is largely customer driven to address specific demands.
  5. Standard Chartered Ventures unveiled its commitment to researching potential uses for quantum computing in the finance and banking industry through its academic partnership with Universities Space Research Association (USRA). USRA is a U.S.-based nonprofit with 49 university members. Standard Chartered Ventures noted that some use cases being explored through quantum computing include simulating portfolios and significantly increasing the speed of market data generation.

If you would like more detailed information around the quantum computing market, please inquire about TBR’s Quantum Computing Market Landscape, a semiannual deep dive into the quantum computing market. Our most recent version was released in June.

Amid a consolidating market, vendors adopt creative initiatives to fight for mission-critical cloud workloads

Public cloud growth leaders

While Amazon Web Services (AWS) continues to dominate the public cloud IaaS market, its rivals continue to expand in the space and even collaborate to take market share. Microsoft and Oracle added a new data center interconnection in Amsterdam, deepening the ties between the vendors as they enable customers to run Oracle workloads on Azure and integrate workloads between the vendors’ clouds. TBR believes Microsoft and Oracle will continue to improve their competitive position against AWS as more data center interconnections are added. In addition, TBR expects Alibaba will become a growing threat to AWS and other U.S.-based vendors as it builds out data centers in APAC and EMEA.

1Q20 Public Cloud: Percentage of Revenue Growth vs. Absolute Dollar Growth

Public cloud remains the largest and fastest growing segment of the cloud market. Changes in customer acceptance, data integrations and innovation have combined to sustain the rapid growth of public cloud adoption. The Public Cloud Benchmark details how hybrid deployments, new use cases for enterprise apps, and trends in emerging technology will make public cloud even more relevant in the future.

IT majors may have incurred higher costs for insurance, health benefits for staff in June quarter

“Rewarding employees, especially the over-performing ones, with higher variable pay during times of crisis is typically a strong morale booster. While attrition also came down across all vendors, vendors know that retaining highly-skilled, loyal personnel can be a hard task, said Boz Hristov, Professional Services Senior Analyst, Technology Business Research Inc.” — The Hindu Business Line

IaaS providers focus on global expansion, while vendors with remote work-enabling SaaS capitalize on demand

1Q20 Public Cloud Benchmark infographic

While Amazon Web Services (AWS) continues to dominate the public cloud IaaS market, its rivals continue to expand in the space and even collaborate to take market share. Microsoft and Oracle added a new data center interconnection in Amsterdam, deepening the ties between the vendors as they enable customers to run Oracle workloads on Azure and integrate workloads between the vendors’ clouds. TBR believes Microsoft and Oracle will continue to improve their competitive position against AWS as more data center interconnections are added. In addition, TBR expects Alibaba will become a growing threat to AWS and other U.S.-based vendors as it builds out data centers in APAC and EMEA.

Public cloud remains the largest and fastest growing segment of the cloud market. Changes in customer acceptance, data integrations and innovation have combined to sustain the rapid growth of public cloud adoption. The Public Cloud Benchmark details how hybrid deployments, new use cases for enterprise apps, and trends in emerging technology will make public cloud even more relevant in the future.

East meets West: A comparative tale of two e-commerce giants placing big bets on the cloud

Alibaba Cloud, AWS focus on build-outs of global footprints via infrastructure investments in 5G and expansion of data center and edge locations

While the growth of the two globally dispersed e-commerce giants Alibaba and Amazon is largely fueled by retail, both businesses have showed marked dedication to the growth of their respective cloud empires, focusing on infrastructure to fuel global expansion and investment in augmenting their respective portfolios. The investment in cloud is evident as the backbone driving each business as they compete on the global stage to become leaders in digital transformation (DT).

Alibaba Group’s aforementioned profit margins, fueled by its B2B operating model, have enabled a hefty investment of $28 billion dedicated to the cloud business. As the world was gripped by the initial effects of the COVID-19 pandemic back in April, the parent company announced the allocation of the sum, which stands as a massive proclamation of the company’s dedication to cloud and related technologies as the core drivers toward the enablement of DT. The sweeping investment, coupled with new leadership and an expanding partnership strategy, solidifies Alibaba’s intent to position its cloud business as a viable contender against AWS, especially in APAC. Alibaba is clearly placing a large majority of its bets on cloud and the future of DT, as the investment equates to 40% of its total 2019 revenue and is 5.7x the revenue of Alibaba Cloud.

The investment will have a profound impact on Alibaba Cloud’s ability to execute on strategies around DT, infrastructure build-out and R&D, and came at a time when the world could not have been in more need of capabilities such as increased bandwidth and enterprise and SME support. The focus in the medium term is a multifaceted push to gain scale globally, attract new customers and expand wallet share with existing customers, and much of this growth will be propelled by the expansion of Alibaba Cloud’s infrastructure backbone with the build-out of data centers and investment in 5G across EMEA and APAC.

Since solidifying its dominance in China and garnering competitive positioning on the global stage, Alibaba has been frequently referred to as the “Amazon of China.” Both companies have anchored their businesses as e-commerce platforms and have demonstrated parallel growth trajectories, becoming mainstays in the lives and businesses of customers globally. The uniqueness of their respective journeys, which have been significantly shaped by their foundations as e-commerce giants, does not overshadow the companies’ similar strategies. Over time, Alibaba and Amazon have evolved rapidly into diversified companies with a distinct focus on technology and digital transformation. While the companies are in different phases of their growth, in terms of size and global footprint, and have different operating models, the investments in and focus on their respective cloud businesses to drive growth are evident when comparing their evolutions and forward-looking growth strategies.  

Integration: Prepare for the future

While integration has always been important from an IT perspective, recent trends have reinforced the strategic importance of integrating applications and data to provide customers with analytics and automation capabilities to better serve their needs. Being agile with new services deployment and building resiliency into operations and IT systems both require integration. Businesses were already using integration to enhance their capabilities across these areas coming into 2020, and COVID-19 reinforced the importance of this strategy in a big way. The good news is that most organizations are confident their current integration strategies and platforms are adequately supporting their business needs. The not-so-good news is businesses are much less confident their integration strategies will be able to meet changing and evolving future requirements. Organizations that are highly confident with their existing integration strategies provide some clues around how to develop a future-ready integration strategy, including enabling citizen developers, establishing competency centers, and utilizing platforms and partners that know their business. While there may not be a silver bullet to improve integration strategies, collectively these strategies can enhance the ability of IT to support future business needs.  

Click here for more information about SAP’s integration capabilities.

Unprecedented levels of government support will help CSPs deploy 5G more quickly and broadly than originally anticipated

CSP spend on 5G infrastructure will scale faster and peak higher than originally anticipated due to the vast amount of support by governments in a range of countries, including but not limited to China, the U.S., the U.K., Japan, South Korea and Singapore. Due to this, typical historical deployment curves for cellular technologies will not apply to the 5G market, which is now expected to be widely deployed globally by the middle of this decade instead of in the later years of the decade. This pull forward and broadening of infrastructure investment are primarily due to attempts by leading countries to support their economies amid the COVID-19 crisis as well as to keep pace with China’s aggressive and broad investment initiative for competitive reasons. Over the past 12 months, 5G has become a highly political issue, and this unprecedented government involvement and funding are being justified on national security, economic competitiveness and public health grounds.

The 5G Telecom Market Forecast details 5G trends among the most influential market players, including both suppliers and operators. This research includes current-year market sizing and a five-year forecast by multiple 5G market segments and by geographies well as examines growth drivers, top trends and leading market players.

Unprecedented government support will help CSPs deploy 5G more quickly and broadly than originally anticipated

5G Telecom Market Forecast 2019-2024 infographic

CSP spend on 5G infrastructure will scale faster and peak higher than originally anticipated due to the vast amount of support by governments in a range of countries, including but not limited to China, the U.S., the U.K., Japan, South Korea and Singapore. Due to this, typical historical deployment curves for cellular technologies will not apply to the 5G market, which is now expected to be widely deployed globally by the middle of this decade instead of in the later years of the decade. This pull forward and broadening of infrastructure investment are primarily due to attempts by leading countries to support their economies amid the COVID-19 crisis as well as to keep pace with China’s aggressive and broad investment initiative for competitive reasons. Over the past 12 months, 5G has become a highly political issue, and this unprecedented government involvement and funding are being justified on national security, economic competitiveness and public health grounds.

The 5G Telecom Market Forecast details 5G trends among the most influential market players, including both suppliers and operators. This research includes current-year market sizing and a five-year forecast by multiple 5G market segments and by geographies well as examines growth drivers, top trends and leading market players.