Quick Quantum Quips: Quantum commercialization is on our doorstep

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 keeps 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.

September 2020 Developments

Recent developments in the quantum computing industry make one thing certain: The commercialization of quantum systems will occur during this decade. The vision of what quantum commercialization will look like varies from something that is very similar to classical systems and is consumed in the cloud to something as miniature as a desktop form factor. Regardless, quantum systems will have computational capabilities for commercial and academic use. TBR expects early production-grade systems to be used in a hybrid configuration with high-performance computing (HPC). As with many other elements of the economy being disrupted by technological innovation, the challenge will be in finding skilled labor to harness the power of quantum systems for economic advantage.

  1. IBM unveiled its quantum road map in September. Included in its road map are the release of a 433-qubit system named Osprey in 2022 and a 1,121-qubit system named Condor in 2023, the latter of which will be capable of enabling scalability. IBM also introduced a super-fridge, named Goldeneye, which is 10 feet tall and 6 feet wide. This development will support the eventual creation of a 1 million-qubit quantum system, which is expected to be released by 2030. This road map makes it clear that at IBM, commercialization of quantum computing is expected within the decade, and therefore, the time has arrived for companies to explore becoming quantum-ready at scale.
  2. Zapata Computing unveiled a Scientific Advisory Board (SAB) to help better align its research agenda around quantum computing with the business needs of global companies interested in pursuing quantum computing within their road maps. Zapata seeks to expand scientific innovation more rapidly than it could do on its own while using SAB-initiated collaboration to pursue advancements that are targeted at customer demand. Expanding within academia remains a goal even though the SAB targets enterprise-level collaboration.
  3. D-Wave, in partnership with the Universities Space Research Association and Standard Chartered Bank, announced a quantum research competition with the goal of bringing quantum computing to nonprofits and universities. The competition aims to advance developments around quantum computing and AI, and the prize for the winner is free time to access the D-Wave 2000Q system.
  4. D-Wave appointed Daniel Ley as SVP of sales and Allison Schwartz as Global Government Relations and Public Affairs leader in September. These appointments highlight that D-Wave is targeting the public sector for sales of its quantum systems, and rightfully so as many governments have allocated budget dollars for quantum investments.
  5. Q-CTRL partnered with Quantum Machines to integrate Q-CTRL’s quantum firmware with Quantum Machines’ orchestration hardware and software offering. The quantum computing market is becoming crowded as startups emerge and more established firms devote some resources to quantum computing innovation. As such, smaller firms like Q-CTRL and Quantum Machines partnering to augment individual capabilities will become more commonplace the closer we get to commercialization at the end of the decade.
  6. Microsoft, in partnership with the University of Copenhagen, has discovered a new material that can be used to simplify topological quantum computing. Presently, large magnetic fields are necessary for computation to take place. The research combined aluminum, europium sulfide and indium arsenide, which together enable a quantum wire device to be an additional and necessary component of topological quantum systems. Ridding the system of the need for magnetic fields is a major breakthrough because the inclusion of a strong magnetic field, while advantageous for the system, could result in unintended negative impacts to other components or systems located within close proximity to the quantum system.

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 upcoming version, which will publish in December, will focus on the software layer of quantum systems. You can also sign up for our webinar on the topic as well, which will be held on Dec. 16 at 1 p.m. EST.

In an unlikely pairing, Oracle backs TikTok to drive OCI business and intimidate IaaS competitors

Acquisition turned partnership: Oracle bands together with TikTok

Oracle’s presence in TikTok-related news — from competitive bid to strategic partnership to now minority stakeholder — has raised eyebrows from the beginning, given the company’s complete detachment from the social media business. Oracle executives have not been shy about expressing their support for the current White House administration, nor for their plans to take IaaS share from Amazon Web Services (AWS) (Nasdaq: AMZN) and Microsoft (Nasdaq: MSFT).

In fact, Microsoft, which showed great interest in TikTok initially, had far more to gain from a potential deal. However, regardless of how Oracle was brought into consideration, the agreement has the potential to benefit Oracle in several ways, including stronger governmental ties, gaining a win over Microsoft, onboarding a new Oracle Cloud Infrastructure (OCI) customer, owning a stake in a profitable company, and lastly, earning the chance to convince the market that Oracle is evolving from an old-school software company to an adaptive cloud vendor that has ties with an up-and-coming generation.  

What does this mean for Oracle’s cloud business?

Big logos give Oracle a confidence boost in chasing competitors, with AWS as leading target

In many ways, TikTok is just another name Oracle can add to its roster of recent high-profile OCI wins, including Zoom and 8×8. Despite the attention that was given to these deals amid COVID-19, Zoom still runs most of its workloads on AWS or in its own data centers. This latest win follows a similar trend, as TikTok is in the middle of a three-year agreement with Google Cloud (Nasdaq: GOOGL), promising to buy over $800 million in cloud services.

However, as part of Oracle’s 12.5% stake in the new company, TikTok will also run on OCI. While this allows Oracle to boast a win over Microsoft and Google Cloud, IaaS incumbent AWS remains the company’s primary target. Recent updates, such as a cost-analysis tool, plans to scale to 36 live public cloud regions by mid-2021, and strategic technology partnerships with Microsoft and VMware (NYSE: VMW) are just a few ways Oracle will continue to apply the pressure.

After months of deliberation on the fate of TikTok — a social media application owned by China-based internet technology company ByteDance — due to security concerns raised by the Trump administration, the U.S. government and involved parties came to a tentative agreement on Sept. 19.

Per the agreement, TikTok will transition to a publicly traded U.S. company, with Oracle (NYSE: ORCL) and Walmart (NYSE: WMT) as initial stakeholders. Under the new deal, ByteDance will hold an 80% stake in the new company, dubbed TikTok Global, which is scheduled to hit the market through an initial public offering in less than one year. Combined, Oracle and Walmart will hold the remaining 20% stake, leveraging data to improve their respective positions in technology and retail. While TikTok will maintain control of its algorithms, the deal will still bring TikTok under U.S. financial law and subject it to security oversight by Oracle as a vested technology partner.

Enterprise edge compute sees opportunity in COVID-19 economy as new use cases emerge

COVID-19 increases demand for edge installments

Despite some challenges and resistance to adoption, the opportunity at the enterprise edge is vast, as edge workloads present a key solution to many of the new problems that have popped up due to COVID-19. For example, brick-and-mortar shopping was once seen as a leisure activity and has now become a front line from which a virus can spread. While retail is a key vertical with much to gain from edge workloads in the era of COVID-19, it is not the only one. Manufacturing floors now require social distancing of workers, which slows down production, and technicians cannot go on-site to fix malfunctioning hardware. The edge is the solution to many of these problems, with use cases including contact tracing, temperature-monitoring cameras, and AI-enabled surveillance to monitor for adequate social distancing and mask wearing.

TBR’s Enterprise Edge Compute Market Landscape, which is global in scope, details edge compute trends among both vendors and their customers. Vendor coverage includes: Amazon Web Services, Atos, Cisco, Dell Technologies, Digital Realty, Equinix, Huawei, Hewlett Packard Enterprise, IBM, Lenovo and Microsoft. This research includes current-year market sizing and a five-year forecast.

Enterprise edge compute opportunity expands in COVID-19 economy as use cases emerge in areas such as societal health and safety

Enterprise edge compute opportunity expands in COVID-19 economy

While the overall IT infrastructure market is challenged by shifting spending habits due to COVID-19, the lifestyle changes necessitated by the virus have shifted workloads and customers closer to the edge, creating significant opportunity in the enterprise edge compute market. However, because this is a lone bright spot in an otherwise uncertain landscape, competition is stark and there will be winners and losers. TBR predicts that as countries and businesses try to regain a sense of normalcy, new technology will be necessary to make it possible, including edge use cases for temperature monitoring and surveillance systems to scan for appropriate social distancing and mask wearing. A key issue with these edge opportunities is how to embrace this technology without sacrificing privacy, a factor that will delay adoption even though the technology is already available.

TBR’s Enterprise Edge Compute Market Landscape, which is global in scope, details edge compute trends among both vendors and their customers. Vendor coverage includes: Amazon Web Services, Atos, Cisco, Dell Technologies, Digital Realty, Equinix, Huawei, Hewlett Packard Enterprise, IBM, Lenovo and Microsoft. This research includes current-year market sizing and a five-year forecast.

PwC’s design of a Central Lending Platform concept for Singapore: Acceleration and digitization for struggling SMEs

A pandemic-induced national problem with a PwC-designed solution

In response to the COVID-19 pandemic and subsequent economic fallout, Singapore’s government sought to bolster the SME market, which employs 70% of the city-state’s workforce and generates 50% of its gross domestic product (GDP), in part through a risk-sharing program for loans to eligible SMEs. Early efforts attracted only 2% of the SMEs to apply for loans, which PwC attributed in part to lengthy loan application and approval processes exacerbated by the COVID-19 lockdown. The gap due to surge in demand and reduced supply provided an opportunity for PwC to design a Central Lending Platform to simplify the loan process, quickly connect SMEs to multiple banks in one single platform, facilitate faster access to capital, and provide Singapore’s government with analytics and data surrounding the SME sector and associated market share, including delivering insight into industry competitiveness to guide quicker and more meaningful policy decisions.

A platform to benefit Singapore’s banks and SMEs

PwC’s design of a Central Lending Platform provides a number of essential benefits for SMEs, Singapore banks and Singapore’s government, including the minimization of human efforts and errors in loan applications and processing; always-on, always available services; and the collection and assembly of previously uncollected data in a single, digital place.

According to PwC, banks prepared to loan to SMEs will rely on the platform for an “immediate eligibility assessment” of whether an SME meets the criteria developed by Singapore’s government. The digital platform will eliminate the need for banks’ loan relationship managers to check the completeness of documents, a process that PwC noted contributed to a 6- to 10-week waiting time from application submission to access to capital. Within three days of an SME’s application, banks will submit loan terms and conditions, although banks can submit loan terms and conditions ahead of the three-day window, and the applying SME can compare and evaluate. In addition, the platform should help banks more efficiently penetrate the SME market as well as accelerate the digitalization of Singapore’s banking sector.

In late August, PwC announced an initiative that can complement the Singapore government’s efforts to facilitate bank loans to small and midsize enterprises (SMEs). Given the confluence of technology, consulting and PwC’s continually evolving business model, TBR requested a discussion with the firm’s leaders working on this initiative. On Sept. 2, TBR spoke with Irene Liu, PwC’s Government and Public Services Co-Lead; Charles Loh, PwC Singapore Consulting Leader; Shierly Mondianti, PwC Southeast Asia Risk & Regulatory Consulting Manager; Andy Goldin, Southeast Asia Head of Advanced Analytics; and Lincoln Yin, CEO of Singapore-based financial technology (fintech) company RootAnt. This special report reflects the discussion and TBR’s ongoing analysis of PwC and its management consulting peers.

Remote work requirements will accelerate cloud adoption road maps, fueling public cloud growth

With Amazon Web Services (AWS), Microsoft, Google and Alibaba established as the IaaS cloud market leaders, Technology Business Research, Inc. (TBR) has noted an increase in partner ecosystem activity, particularly among IT services vendors, such as Accenture, Infosys and Cognizant, that are vying for a share of cloud services like migration and implementation.

Consolidation will accelerate as leaders embrace coopetition, evidenced by activity from Microsoft and Oracle that allied to target AWS’ dominance in the IaaS space. This trend will further separate the leaders from the rest of the pack while creating an adjacent opportunity as customers deploy multivendor and hybrid cloud environments — which bodes well for infrastructure specialists such as IBM’s Red Hat and VMware, particularly as the latter maintains its emphasis on being vendor agnostic. Further, TBR expects rising enterprise appetites around technologies like containerized applications will facilitate PaaS market momentum in the near term as customers develop and test the application frameworks internally before making them live on their hybrid architectures.

Public Cloud Market Forecast 2019-2024E

Overall Forecast

Though the COVID-19 outbreak is impacting the public cloud market, benchmarked vendors with the largest market share are positioned to protect their leadership, as a diverse install base buffers spending slowdowns in industries such as hospitality. Other vendors are relying on strategic investments in areas like data integration and multicloud management to carve footholds in PaaS and become more attractive among infrastructure leaders that are increasingly embracing vendor agnosticism to expand their IaaS addressable market.

Public cloud remains the largest and fastest growing segment of the cloud market. The outbreak of COVID-19 has forced enterprise customers to increase their usage of cloud infrastructure and solutions, a trend that will benefit leading cloud providers and lead to further consolidation in areas such as IaaS and PaaS through the current forecast period. The Public Cloud Market Forecast 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.

Cloud supports enterprise needs related to COVID-19, facilitating public cloud revenue growth

Cloud supports enterprise needs related to COVID-19, facilitating public cloud revenue growth

With Amazon Web Services (AWS), Microsoft, Google and Alibaba established as the IaaS cloud market leaders, Technology Business Research, Inc. (TBR) has noted an increase in partner ecosystem activity, particularly among IT services vendors, such as Accenture, Infosys and Cognizant, that are vying for a share of cloud services like migration and implementation.

Consolidation will accelerate as leaders embrace coopetition, evidenced by activity from Microsoft and Oracle that allied to target AWS’ dominance in the IaaS space. This trend will further separate the leaders from the rest of the pack while creating an adjacent opportunity as customers deploy multivendor and hybrid cloud environments — which bodes well for infrastructure specialists such as IBM’s Red Hat and VMware, particularly as the latter maintains its emphasis on being vendor agnostic. Further, TBR expects rising enterprise appetites around technologies like containerized applications will facilitate PaaS market momentum in the near term as customers develop and test the application frameworks internally before making them live on their hybrid architectures.

Public cloud remains the largest and fastest growing segment of the cloud market. The outbreak of COVID-19 has forced enterprise customers to increase their usage of cloud infrastructure and solutions, a trend that will benefit leading cloud providers and lead to further consolidation in areas such as IaaS and PaaS through the current forecast period. The Public Cloud Market Forecast 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.