Quick Quantum Quips: Quantum use cases expand to new industries

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.

January 2021 Developments

An increasing number of companies across a variety of industries are making deals and forming partnerships to seize opportunities for first movers in emerging quantum technology. Many organizations and several international governments are focused on laying a broad foundation for quantum innovation. However, with quantum expected to be a major disruptor in biopharma research and development as the technology matures, a considerable number of biotech and pharmaceutical companies are approaching quantum investments from a narrower perspective. Together, private organizations and public entities will continue to drive the emergence of new quantum use cases through investments that will also accelerate the adoption of the technology.

  1. Atos announced its commitment to participate in France’s quantum plan to take advantage of new and upcoming quantum-related capabilities. Through the strategy, the French government will collaborate with private industry partners and academic institutions to leverage quantum technology in a way that addresses wide-ranging socioeconomic issues, including healthcare, finance and the environment. Atos will contribute its post-quantum cryptography and will develop Noisy Intermediate-Scale Quantum (NISQ) simulators and accelerators and integrate them into high-performance computing platforms. Atos’ industry expertise and international business relationships will also play a role in advancing France’s national quantum strategy as well as the European Union’s (EU) quantum strategy, which seeks to leverage EU-based quantum innovations across the continent. Atos’ actions will not only benefit the French government and the country’s residents but also strengthen the company’s posture in the global quantum space.
  2. Cambridge Quantum Computing (CQC) appointed Bob Coecke as chief scientist. Coecke was a University of Oxford professor for the past 20 years and served CQC as a senior scientific adviser prior to his appointment. His quantum knowledge makes him a strong asset for CQC. The quantum computing company also announced a solution that addresses a multiphase flow classification problem within the energy sector. Working in partnership with Aker BP, a European energy company, CQC developed and validated a quantum machine learning (QML) algorithm delivered by IBM quantum processors. The QML algorithm stands as one of the industry’s first use cases in the energy sector, paving the way for related innovations.
  3. Google entered into a collaboration with Boehringer Ingelheim, a Germany-based pharmaceutical company, to support its biopharma research and development with quantum technology. Over the course of three years, Boehringer will co-lead the project from its new Quantum Lab and will leverage Google’s Quantum AI division to simulate biological mechanics. The companies anticipate these simulations will contribute to the discovery of modern medical treatments, and Boehringer expects that quantum will redefine the pharmaceutical industry by accelerating R&D processes.
  4. Amazon Web Services (AWS) announced it will collaborate with India’s Ministry of Electronics and Information Technology to establish a quantum computing applications lab in the country. Once the lab is complete, government agencies and other local entities will be able to take advantage of quantum computing “as a Service,” addressing use cases in industries ranging from healthcare to agriculture. AWS will continue to support the lab, providing hosting and technical assistance. This collaboration will expand AWS’ footprint in the region, which will prove valuable as India’s digital transformation gains momentum.
  5. Microsoft will host its second Azure Quantum Developer Workshop on Feb. 2. The event will feature technology from select members of Microsoft’s Azure Quantum ecosystem. Honeywell, 1QBit and IonQ will highlight how Azure Quantum supports their respective quantum technologies and associated use cases. Microsoft will use the event to market the value of Azure Quantum to outside developers.

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 latest version, published in December, focuses on the software layer of quantum systems.

With post-pandemic world in sight, 6 IT services, digital transformation and consulting trends emerge

1Q21 belongs to the India-centric IT services vendors

India-centric vendors demand considerable attention at the start of 2021 for three trends cutting across their sales motions, talent strategies, and avenues to new partnerships and intellectual property. 

Winning deals the old way

In a return to the old-school tactic of rebadging client employees, India-centric vendors have begun winning larger outsourcing deals, in part because the pendulum has swung back to clients demanding “run-the-business” IT services, which naturally favors outsourcing by low-cost offshore IT services vendors. Using an old-school approach to buy their way into mega-sized contacts or secure renewals may heighten competitive pressures for IT services vendors that lack the same scale in offshore locations or willingness to absorb headcount to open doors for long-tail managed services opportunities. Across the outsourcing space, TBR sees a broad trend of vendor consolidation in contracts up for renewal, further pressuring all competitors to expand contract sizes in any way possible.

The most challenged, but also the vendor group with the biggest opportunity, will be the Big Four. Over the past five-plus years, all four firms, to varying degrees, have expanded their application services capabilities delivered through low-cost locations to better appeal to new buyers. Although firms like Deloitte have experienced some initial success, reaching critical mass will require partnering more strategically with the India-centric vendors, unless the Big Four want to adjust their pricing for more mainstream, almost commoditized IT services.

Developing talent onshore  

With attrition diminished by COVID-19, India-centric vendors will continue to push to expand onshore U.S. talent, including in ruralshore locations. By focusing on recent university graduates, the India-centric vendors can access relatively cheap talent, spend less on visas, and market locally based talent as part of their sales pitch. In addition, all IT services vendors could face a tech talent threat from cloud and software majors. While companies such as Google (Nasdaq: GOOGL) and Microsoft (Nasdaq: MSFT) have mostly gone after upper-mid-level and senior-level services talent, strategies could change as those software and cloud vendors expand their services capabilities (for more detail on technology vendors’ expansions in the services realm, see TBR’s September 2020 Digital Transformation: Cross-vendor Analysis). 

Turning to open source

Lastly, India-centric vendors, especially those lacking software-specific talent and IP, have begun promoting their value to Microsoft and other cloud and software giants by investing in and developing more talent through open-source consortiums. In contrast to traditional R&D efforts, open-source consortiums can provide less costly and time-consuming avenues to developing IP and possibly unlock new business opportunities through consortium partners. TBR also believes increased participation in open-source consortiums could potentially have long-term impacts on services vendors themselves, including development of software mindsets and associated practices. 

KPMG: Fundamentally what blockchain does is digitize trust

In late 2020, KPMG’s blockchain team outlined to TBR the efforts the firm has made to evolve its blockchain practice, expanding into concrete and discrete areas in which the firm can “create an ecosystem around something that already exists, then add a layer of trust, enabled by blockchain,” as made evident by the three focus areas detailed by the KPMG team: cryptoasset custody and analytics, climate accounting infrastructure, and energy trading reconciliation. KPMG explained that the firm’s digital transformation initiatives, which underpin the entire blockchain practice, remain anchored by data, identity and ecosystem — conveniently core elements of blockchain. 

Americas Blockchain and Digital Assets Leader Arun Ghosh went one step further, saying KPMG had intentionally moved away from “leading with blockchain” to building a message around digitalization and trust: “Blockchain is digitizing the infrastructure. Fundamentally what blockchain does is digitize trust.” In TBR’s view, this business-problem-first, technology-second approach mirrors what consulting clients say they want and plays to KPMG’s strengths.

Measuring environmental commitments: Climate Accounting Infrastructure

Businesses face challenges in proving to clients, stakeholders and regulators that their efforts to address climate change have a measurable impact on the environment and meet enterprisewide goals. Stepping up to address that challenge, KPMG saw an opportunity to deploy blockchain solutions as part of a Climate Accounting Infrastructure (CAI) offering. In essence, verifiable emissions data depends on trust, which can best be built and sustained through a combination of tools, including blockchain solutions, AI, enhanced IoT sensors and cloud.

For KPMG, the journey to a blockchain-enabled climate accountability offering started with a client in the financial services sector that was seeking help to meet its sustainability goals. Operating across multiple regions, with overlapping and sometimes conflicting standards and regulations, the client wanted to invest smartly, prove value to its shareholders, and build trust with customers and regulators, all while fully understanding the costs and potential impacts, both positive and negative. Once KPMG devised a blockchain-enabled approach — which KPMG says provides “near real-time climate accounting and reporting to help clients meet their climate goals” — the firm narrowed its focus down to two core industries: real estate and oil & gas.

As Ghosh explained to TBR, these industries face increasing compliance pressures, as well as structural challenges to meeting environmental standards, making them excellent initial target clients. The specific blockchain component, according to KPMG, comes through securing the massive amounts of structured and unstructured data in a way that can be verified but not altered, leading to greater trust and transparency for all parties.

In a Dec. 29, 2020, article, The New York Times detailed the pressures facing the real estate industry in New York City, starting with the sheer volume of carbon emissions coming from the city’s buildings (close to 70% of the city’s total emissions). According to the article, a 2019 law “requires owners of structures 25,000 square feet or larger to make often sizable cuts in carbon emissions starting in 2024 or pay substantial fines” and “affects 50,000 of the city’s roughly one million buildings, including a substantial number of residential buildings.” The city’s role as a global financial hub and KPMG’s heritage in accounting and financial services present a strong opportunity for the firm to begin building a use case for its CAI offering, particularly if the firm leverages its existing NYC-based client relationships to gain introductions to commercial real estate owners.

Last fall, TBR met with KPMG’s blockchain leadership team, including Americas Blockchain and Digital Assets Leader Arun Ghosh, and discussed changes the company’s blockchain practice has undergone since the October 2019 Blockchain Analyst Day. As TBR prepares in 2021 to add a blockchain-specific component to our Digital Transformation portfolio, examining in detail how IT services vendors and consultancies have been building blockchain practices, we will publish special reports describing specific vendor offerings and how those offerings and supporting capabilities fit within the larger blockchain ecosystem.

Leading enterprises are planning massive investments in DT over the next few years; 5G implicated in many cases

Leading enterprises are planning massive investments over the next few years; 5G is implicated in many cases

Drivers and Investments

Several early adopter enterprises have opted for 5G versus Wi-Fi 6, portending a market shift to cellular.

Leading retailers (e.g., Walmart and Walgreens) are adopting 5G and edge computing as part of their digital transformations (DT).

Cloud providers (aka webscales) are focused on adding network applications to their cloud marketplace ecosystems to make consumption of networking resources much easier for enterprises.

TBR’s Private Cellular Networks Market Landscape deep dives into the market for private cellular networks. This global report covers enterprises that are investing in private cellular networks as well as all of the major vendors and some nascent players that provide infrastructure products and services in this space. The research includes key findings, key market developments, market sizing and forecast, regional trends, technology trends, vertical trends, use cases, and key customer deals, alliances and acquisitions that are occurring in the market.

Leading enterprises are planning massive investments in DT; 5G implicated in many cases

Leading enterprises intend to spend big on digital transformation, which in many cases implicates 5G

Leading companies in their respective verticals, such as Amazon, Walmart, Walgreens, Ford and Deere & Co., are preparing to make relatively large investments in digital transformation (DT) over the next few years as they adjust to the post-pandemic new normal, respond to competitive pressures and capitalize on new opportunities. In many cases 5G will play a key role in these digital transformations, serving as a foundational platform that will support these enterprises’ digital infrastructure and business operations (e.g., drone operations and reimagined in-store experience). Ecosystem players are striking strategic partnerships with some of these key enterprises (e.g., Verizon with Walmart and Walgreens) to capitalize on opportunities brought about by 5G as well as edge computing and AI.

Several early adopter enterprises have opted for 5G versus Wi-Fi 6, portending a market shift toward cellular

Several leading enterprises, such as Whirlpool, have made a strategic decision to deploy 5G versus Wi-Fi 6 in their factories after their assessments deemed 5G can better meet their long-term needs. These decisions are in line with TBR’s belief that 5G should be viewed as a future-proof connectivity platform that will serve as a foundation for enterprise digitalization. Though Wi-Fi 6 (and LTE) will have their place in enterprise networks going forward, TBR expects the pendulum to swing more toward 5G as the de facto connectivity technology for enterprise communications and IT-OT convergence.

TBR’s Private Cellular Networks Market Landscape deep dives into the market for private cellular networks. This global report covers enterprises that are investing in private cellular networks as well as all of the major vendors and some nascent players that provide infrastructure products and services in this space. The research includes key findings, key market developments, market sizing and forecast, regional trends, technology trends, vertical trends, use cases, and key customer deals, alliances and acquisitions that are occurring in the market.

Cloud migration rises to top as central IT investment for driving IaaS and PaaS adoption

Cloud migration rises to top as central IT investment for driving IaaS and PaaS

Key Insights

The pandemic has laid bare the benefits of the cloud, serving as a proof point for the central role cloud plays in supporting organizations’ short- and long-term digital transformation road maps.

COVID-19 has dramatically accelerated the timeline for cloud adoption for many organizations, with public cloud as the most common method of delivery for IaaS and PaaS workloads.

The use of cloud professional services will continue to grow due to the challenges of migrating increasingly complex workloads to the cloud while working in a remote environment.

TBR’s Cloud Applications Customer Research tracks how customers are modernizing application environments and choosing between different cloud delivery methods. Leveraging in-depth conversations between TBR and enterprise customers, the Cloud Infrastructure & Platforms Customer Research provides subscribers with actionable insight that they can use to better understand their customers’ behavior and win cloud infrastructure deals. Topics covered for both reports include public, private and hybrid delivery options; decision-making involvement and criteria; leading vendor perception; field positioning and competition guides; and the impact of emerging trends (e.g., containers, security, platforms).

Accelerated cloud adoption will persist even after COVID-19 pandemic subsides

The outbreak of COVID-19 led to constraints around enterprise IT budgets, but the emergence of a digital workforce resulted in accelerated adoption of cloud applications, particularly those related to productivity and customer-facing suites in the front office. Enterprises needed to rapidly shift operations to the cloud to support remote workforces, increasing the value of service arms and IT services partners to mitigate client risk in the form of cloud road-mapping, migration and implementation services.

In the long term, internal service capabilities and IT services partners will become critical to enabling enterprises’ digital transformations, particularly as front-office cloud deployments mature and as clients explore migrating more customized environments like ERP to cloud or pursue industry-based solution deployments in highly regulated industries like healthcare and the public sector.

The bulk of enterprises are employing a best-of-breed approach to the development of their cloud IT architectures, evidenced by 42% of respondents stating that they currently use three or more SaaS vendors. As a result, application vendors have been driving alliance activity with infrastructure providers to give clients more flexibility around how they consume cloud, evidenced by SAP’s decision to offer SAP Business Suite 4 HANA with leading infrastructure players like Microsoft Azure and Amazon Web Services. While best-of-breed IT will remain prevalent, cloud players have increasingly driven investments to tighten the integrations of complementary suites to expand share of client wallet by enabling multiproduct deals, a tactic that has been effectively employed by Salesforce and Microsoft in 2020.

Cloud players aim to accelerate the proliferation of their IP by employing industry-based go-to-market capabilities to provide clients with prebuilt data models that alleviate concerns around data compliance and governance. This tactic aligns with clients’ needs, as 51% of respondents who deployed industry solutions cited compliance and regulatory standards as a key benefit. To strengthen the value of industry clouds to clients, vendors are offering prebuilt integrations with leading data providers, such as Microsoft’s integrations with electronic health record providers through Cloud for Healthcare. These types of integrations will be critical to accelerating client time to value, while ensuring the integrity of data by meeting industry-specific regulations.

TBR’s Cloud Applications Customer Research tracks how customers are modernizing application environments and choosing between different cloud delivery methods. Leveraging in-depth conversations between TBR and enterprise customers, the Cloud Infrastructure & Platforms Customer Research provides subscribers with actionable insight that they can use to better understand their customers’ behavior and win cloud infrastructure deals. Topics covered for both reports include public, private and hybrid delivery options; decision-making involvement and criteria; leading vendor perception; field positioning and competition guides; and the impact of emerging trends (e.g., containers, security, platforms).

Women in STEM: IBM’s Jennifer Glick on navigating the quantum career path

The STEM field is growing, creating tremendous opportunity for well-trained applicants. While STEM has traditionally been a male-dominated field, cultivating interest at the undergraduate level can help draw in more women who may have the necessary skills but have never considered STEM as a career path. In TBR’s monthly series Women in STEM, we discuss how female leaders have successfully pursued careers in STEM and are encouraging more female representation by passing on the lessons they’ve learned to other women who are pursuing this path.

Meet Jennifer Glick, a quantum computing applications researcher at IBM

Jennifer Glick received her doctorate in physics in 2017 for her work on the quantum information theory of measurement. In 2020 Glick was selected as one of MIT Technology Review’s 35 Innovators Under 35 for her work in quantum computing.

Jennifer Glick, IBM
Jennifer Glick, IBM Quantum Computing Applications Researcher

In her current role at IBM, Glick identifies promising quantum applications and develops proofs of concepts that drive advancements in quantum algorithms and methods. This work is essential to moving quantum computing from labs to the real world. In our recent discussion with Glick, she spoke of viewing college with an outcome mindset and boosting learning through free online resources as well as navigating the science path to a quantum career.

Encourage women to pursue STEM careers by being available to answer questions

Navigating the transition from academia to the corporate world can be difficult as universities do not always provide significant scaffolding during students’ academic career. For the highly specialized STEM fields, this is particularly true. But Glick recommends embracing this perceived roadblock with a growth mindset. “It turns out, [a growth mindset] is a great antidote to the impostor syndrome. Strategically seek out new experiences, ideas and challenges that get you out of your comfort zone,” says Glick. “It’s surprising how much you can learn just by observing the people around you.”

Glick adds that leaders in STEM fields can encourage young women to pursue careers in STEM by helping foster their initial interest and supporting them as that interest flourishes. Glick practices what she preaches, having mentored high school, undergraduate and graduate students while working toward her Ph.D.

View college with an outcome mindset, and then build backward with coursework

Many companies take a solutions outcome approach to their technology investments. Customers seek a particular outcome, and vendors then build architectures behind the scenes to enable that outcome. The customer does not necessarily know or care what underlying infrastructure they obtain as long as the desired outcome is achieved.

Education and how it relates to career choice can be thought of in a similar way. We compartmentalize education as something you complete before you start a career, but the reality is that lifelong learners are more likely to have successful careers. Glick’s advice to women considering a career in quantum computing is, “Study a combination of quantum physics, computer science and applied mathematics. A Ph.D. in physics is not strictly a prerequisite for working in quantum computing.”

Retool your existing skills via free online resources

For many, the idea of going back to college for additional degree work is unattainable. For those without existing degrees in quantum-related areas, Glick recommends leveraging free online resources to learn as much as you can on your subject of interest. As the field of quantum computing matures and expands, many related jobs in the industry are emerging, including around software engineering, sales, marketing and design. A variety of skills are necessary for the field of quantum computing to have long-term success. “Pay attention to key thought leaders in quantum computing — they can offer insight into where the field might be headed in the years to come,” says Glick.

Additionally, Glick recommends finding internships within the industry. Well-established STEM fields frequently offer internships to help apprentice young people seeking to work in fields with skills shortages. As careers in STEM become more technical, undergraduate degrees lay the foundational knowledge but on-the-job-training is the most valuable way to obtain the specialized skills necessary to succeed in STEM. A longstanding challenge with internship access has been physical location. However, COVID-19, for all of the hardships it has created, has connected the world digitally more than ever before. Young people in rural locations can now access internships and training at major metropolitan corporations virtually, which removes this physical location roadblock.

Don’t be daunted by the science: Quantum is a growing field with nonscientific opportunities as well

Perhaps Glick’s most important piece of advice is the reminder that emerging and complex scientific technologies are accessible. “Start using quantum computers,” says Glick. “Contribute to open-source software, try the circuit composer on the IBM Quantum Experience, use Qiskit to design and test quantum circuits and algorithms.” IBM has provided ways for people interested in a career in quantum computing, or simply interested in the technology as a hobby, to access it and not only learn from the technology but also eventually teach others. Leveraging online resources and courses, such as the Qiskit Textbook and Qiskit Global Summer School, in conjunction with playing around with IBM’s accessible quantum assets are ways to become smarter around a STEM technology.

COVID-19 shifts demands in the HCI space, creating opportunity for nimble vendors

Accelerated demand due to COVID-19 has more vendors focusing aggressively on the HCI market opportunity

Over 40% of data center customers already consume hyperconverged infrastructure and have relatively strong loyalty to their incumbent HCI vendor. Still, 33% of respondents in TBR’s 2H20 Hyperconverged Platforms Customer Research report do not use HCI at this point in time, and HCI vendors will be focusing on this opportunity for market expansion.

Customers increasingly leverage HCI for digital-transformation-related workloads. The edge appears to be a key location for HCI installments, as the technology by definition is well suited for such deployments. IT modernization continues to increase demand for storage and compute capacity in remote and edge locations, and HCI is often the hardware of choice for such use cases.

Because there remains significant opportunity for private cloud and edge infrastructure — two uses for which HCI is heavily leveraged — competition is strong both from within and outside the HCI market landscape. Nontraditional competitors such as Amazon Web Services and ODMs increase their appeal by offering white-box private cloud hardware alternatives. At the same time, HCI vendors increasingly compete against each other and public cloud alternatives by offering new pricing models, as hardware commoditization squeezes the potential for differentiation through infrastructure innovation alone.

Impact of COVID-19 on Hyperconverged Platforms Spending

TBR’s Hyperconverged & Converged Market Landscape provides a high-level view of both markets, including key trends, recent alliance and acquisition activity, and analysis of the customer adoption cycle, including total market data. This report’s unique differentiator is its inclusion of nine deep-dive vendor profiles. This report largely focuses on which vendors are leaders, laggards and up-and-comers in the hyperconverged and converged markets, providing deep analysis into which vendors are differentiating themselves and how. TBR’s Hyperconverged Platforms Customer Research, which surveys 400 decision makers annually, addresses hyperconverged infrastructure (HCI) vendors’ customer-centric questions, drilling down into key categories such as adoption and budget, purchase drivers, workloads and attributes, purchase patterns, and vendor selection.

Market disruption creates HCI opportunity as customers look to consolidate data center footprints

Market disruption creates HCI opportunity as customers look to consolidate data center footprints

Insights

Digital transformation increases the volume of data collected and processed by organizations, making IT environments more complex to manage. Hybrid cloud is often the answer to this challenge, and many hybrid cloud environments leverage HCI as the underlying infrastructure for private cloud instances.

Microsoft’s play in the HCI market allows customers to keep their hardware vendor, unlike AWS Outposts. This is appealing to customers that have already selected a major hardware vendor but seek the flexibility of hybrid cloud.

TBR’s Hyperconverged & Converged Market Landscape provides a high-level view of both markets, including key trends, recent alliance and acquisition activity, and analysis of the customer adoption cycle, including total market data. This report’s unique differentiator is its inclusion of nine deep-dive vendor profiles. This report largely focuses on which vendors are leaders, laggards and up-and-comers in the hyperconverged and converged markets, providing deep analysis into which vendors are differentiating themselves and how. TBR’s Hyperconverged Platforms Customer Research, which surveys 400 decision makers annually, addresses hyperconverged infrastructure (HCI) vendors’ customer-centric questions, drilling down into key categories such as adoption and budget, purchase drivers, workloads and attributes, purchase patterns, and vendor selection.