The next quantum leap and the end of business as we know it
Still unknown to many, physics is bringing the digital future of business and organizations to us sooner than we think. Are we ready?
Imagine a technology that could allow hackers to access everybody’s passwords, worldwide, in a matter of minutes; or with the right adjustments could create unbreakable encryption and information security. These are just a few potential consequences of breakthroughs in the field of quantum computing, which applies the unique laws of quantum mechanics to developing computers with remarkable capabilities.
Other benefits of quantum computing include speed and energy efficiency improvements, as well as increased computational capacity over current computers, potentially unlocking breakthroughs in fields from drug discovery to artificial intelligence, and space exploration to weather forecasting which were previously too complex for conventional computers .
To illustrate quantum computing, consider the following from Business Insider: “imagine you only have five minutes to find an “X” written on a page of a book in a library of 50 million books. It would be impossible. But if you were in 50 million parallel realities, and in each reality you could look through the pages of a different book, in one of those realities you would find the “X.” In this scenario a regular computer is you running around like a crazy person trying to look through as many books as possible in five minutes. A quantum computer is you split into 50 million yous, casually flipping through one book in each reality” .
Many physicists from Albert Einstein to Carl Sagan have agreed that the principles of quantum physics are so strange that they defy understanding. However, it is precisely these strange properties which are being harnessed to develop the next generation of computing.
Quantum computers are based on the physics of the small – the scale of individual electrons. At this scale, nature behaves differently than it does at our “human” scale. Examples include “superposition” (objects existing in multiple states simultaneously) and “entanglement” (intrinsically connected objects regardless of their distance apart), which can be manipulated to perform operations on data. Compared to modern digital computers that fundamentally store data in one of two states – known as “bits,” quantum bits or “qubits” can be in an infinite number of states at once .
With another breakthrough in quantum computing announced this week, the quantum computing revolution may be closer than many of us realize . Several companies have already launched various attempts to capitalize on this field, including Google, IBM and D-Wave [4,5,6].
D-Wave is the first company offering quantum computers, with basic versions having already been used by Google, Lockheed Martin, NASA and others. Founded in British Columbia, Canada in 1999, the company made a big bet on the development and feasibility of quantum computing technology. However, that bet paid off with its first functional quantum computer priced at $10 million, with a number of customers already engaged and further developments on the way [4,5,6].
Business and Organizational Model
D-Wave originally chose to outsource its research to other laboratories by funding research in exchange for rights to intellectual property . After securing the concept and design from 1999 to 2006 (D-Wave holds 100 US patents and over 60 scientific publications), the company embarked on engineering, commercialization and scale. The go-to-market model was based on joint collaboration with strategic customers in specific verticals including defense, web 2.0 and energy. The company intends to achieve a sustainable model by focusing on long-term growth and building multi-year relationships with customers, which includes professional and maintenance services, and offering multi-year subscription contracts to clients .
- Publicity. Scientists were critical of the early D-Wave computers, arguing that they were not actually quantum machines. Though D-Wave since disproved these claims, maintaining commercial momentum will require positive publicity to bolster their brand name and avoid any perception of deceit. This is especially important since their product is based on complicated physics which could lend itself to a lack of trust by consumers in the nascent stages of commercialization [6,9].
- Partnerships. D-Wave has already partnered with corporations, laboratories, universities and governments to foster implementation of its product, however it should further invest in this arena as these partnerships will fuel early adoption of this technology. Without aggressively pursuing these partnerships, the company also risks losing market share to competitors. Moreover, if D-Wave is able to expand its user-base, it will foster a sort of competition built around its product; organizations will not want to be left behind with outdated computers [6,9].
- New Research. D-Wave must continue to source capital and continue to innovate, as competitors will be motivated to enter the market with their own breakthroughs in quantum computing.
- Regulation. As a new technology, D-Wave is susceptible to new laws focused at its technology. If unforeseen repercussions arise from quantum computing, D-Wave will likely be the first organization affected. The company must be forward-thinking and take proactive strategic measures, such as working with regulators and exploring challenges.
 Dickerson, Kelly, “7 awesome ways quantum computers will change the world.” Business Insider. Web. 18 Nov. 2016. http://www.businessinsider.com/quantum-computers-will-change-the-world-2015-4
 “Quantum computing 101” University of Waterloo. Web. 18 Nov. 2016. https://uwaterloo.ca/institute-for-quantum-computing/quantum-computing-101
 Ranger, Steve, “Researchers claim quantum computing breakthrough, explain it using beer.” ZDNet. Web. 18 Nov. 2016. http://www.zdnet.com/article/researchers-claim-quantum-computing-breakthrough-explain-it-using-beer
 “Quantum A.I.” Research at Google. Web. 18 Nov. 2016. http://research.google.com/pubs/QuantumAI.html
 “A New Way of Thinking: The IBM Quantum Experience.” IBM Quantum Computing. Web. 18 Nov. 2016. http://www.research.ibm.com/quantum/
 D-Wave Systems Inc. Website. Web. 18 Nov. 2016. http://www.dwavesys.com/
 MacCormack, Alan D., Ajay Agrawal, and Rebecca Henderson. “D-Wave Systems: Building a Quantum Computer.” Harvard Business School Case 604-073, April 2004.
 “D-Wave Overview.” Web. 18 Nov. 2016. http://www.dwavesys.com/sites/default/files/D-Wave-Investor%20Presentation-Web100814-2.pdf
 Shah, Agam. “D-Wave will ship a 2,000-qubit quantum computer next year.” PC World. Web. 18 Nov. 2016. http://www.pcworld.com/article/3122452/hardware/d-wave-will-ship-a-2000-qubit-quantum-computer-next-year.html
Photo credit: http://quantumhealthjournal.com/ (Accessed Nov. 18) Quantum mechanics helps describes discrete locations and objects as spectra of probabilities, from which novel computing principles can arise. This picture represents probability distributions of electron locations around their atomic nucleus – the building block of quantum computing.
Student comments on The next quantum leap and the end of business as we know it
Great post, Mark. I completely agree with you in that D Wave needs to find a clear avenue to commercialization of quantum computing technology if it wants to accelerate its growth. I’m sure the tech has thousands of applications, but without demonstrating to the world at least one concrete example how D Wave has driven profitability, the technology is more of an academic pursuit.
The concept of quantum technology has been exciting for a lot of people. I did some additional browsing and many people feel that we are still 10-20 years away from the technology becoming mainstream. It will be interesting to see if D-Wave is able to stay afloat and ahead of competitors in the years to come. Are they doing anything to create applications for the technology in the areas mentioned (i.e. Healthcare)?
A fascinating post Mark! Given our recent discussions on IBM’s Watson, it will be fascinating to see how quantum computing impacts the pace of development in machine learning and artificial intelligence. I am curious to learn more about D-Wave’s business model. Are they focused more on scientific or military use cases? I also am curious about how the United States government (who strives to have the fastest computers in the world) is interfacing with the increasing number of companies beginning to enter this market. I also think it will be fascinating to contemplate what life looks like in a world where quantum computing actually exists. Will our online data become truly un-hackable or will everything be accessible? The history of encryption has been a perennial battle between code makers and breakers. It will be interesting to see which side quantum computers helps to push forward.
The potential for quantum computing is really mind-boggling. I wonder how D-Wave made the decision to go into the industries they did? Or perhaps the decision was made for them given the customers who were actually willing to partner…..
I can see this sort of technology having interesting applications in drug discovery. In fact, when IBM opened up their quantum computing platform to the public, that was one of the first areas they mentioned potential applications in.
Thank you for sharing this Mark. I see Quantum computing as the next evolutionary phase of computation in which (as it wasn’t with previous systems) the need for human intervention is extremely limited. In previous technologies, a lot of organization across industries were very much invested in creating meaningful change to create impact. However, one of the challenges I see in Quantum Computing is that since it is so capital intensive, the flow of capital seems to fairly limited from a few select corporations and venture capital firms – this has fairly limited the number of companies that can innovate in the space. It will be interesting to see how the technology evolves from here on.
Mark, the regulation piece is really intriguing. Could the government eventually require quantum computers \to be registered and regularly audited to make sure they aren’t being used for nefarious activities? In pondering this, one solution is for the government to amply increase funding into the technology such that they own the best equipment. Back during the space race, the government extensively funded and classified technology R&D, thereby leading to complete ownership and the first to reach to the moon. Perhaps a similar approach could be used for the quantum computer, such that the government’s computers would be able to out-perform other systems that are aimed to achieve criminal effects. Although this could lead the government down a rabbit hole whereby others can jerry-rig systems to have comparable effects for fractions of the cost (e.g. expensive Humvee caravans vs roadside IEDs), this solution may help to ensure technology superiority. Though, I realize all the consequences of registering all systems.
Interesting article Mark – while I always struggled with the “particle-in-a-box” and “Schrodinger’s Cat” concepts in the quantum physics section of P-Chem, I can certainly understand the massive business potential of this technology. With reports that Moore’s Law is running out of steam (see below), this technology may restart and even accelerate the pace of computing horsepower improvements.
Very interesting post Mark! I would be very interested to understand how these multiple realities are actually harnessed so a computer can operate in 50 realities at once. Maybe that’s more of a PhD in physics question than b-school question though!
Thanks Mark! Quantum computing is definitely a huge leap for humanity, and we’re yet to figure just how grand the applications might be. There’s a pretty popular theory that this is also a major step on the path to a true AI consciousness, as our own biological brains might in fact be at least partially based on quantum computing in some form. Sounds like a plot for a sci-fi story, but the possibility of various quantum effects in our brain does in fact make it possible to explain certain attributes of our thinking that the classical “electrical computer” theory just can’t.