Time to start investing in quantum computing software?

While the argument over whether D-Wave represents true quantum computing still rages the company moves on and opens a software developer portal.

Assuming D-Wave succeeds in the marketplace (and I wish them all the best) they will own the term "quantum computing" for the time being. It is very unlikely that another vendor will introduce another quantum computing device in the intermediate future. Being the ultimate first mover in this nascent market D-Wave has the unique chance to shape it to their advantage.

The (mostly academic) critics won’t cease to point out that D-Wave doesn’t implement a universal gate programmable quantum computer – not that the company ever claimed such a thing - but assuming that their device delivers superior computational power the market won’t care.

But there is a catch: D-Wave’s optimization engine is versatile enough to help with many real life optimization business cases but the path to actual usefulness is all in the software.

Let’s first look at the B2B market (I’ll discuss applications in the consumer space in a later blog entry).

It is hard to get market share numbers that break out spending on IT solutions for optimization software. Currently this is mostly folded into the BI and CRM category, both areas that pose plenty of business cases (e.g. channel, price, revenue, supply chain optimization to just name a few). According to Forester, BI and CRM are the main drivers of IT spending in 2012.

Even if D-Wave could just dip a toe into this huge market it’ll render it a commercial success.

But selling any optimization solution to businesses is no small feat. The potential customers don’t care about the underlying technology and won’t be interested in talking about hardware and algorithms.

Making a persuasive case is tricky because it requires a special skill mix: Domain expertise as well as understanding of the parameters within which an optimal solution can be found. While it suffices to mention this as “boundary condition” to those with a mathematical background, this term will result in blank stares with your average business crowd and is guaranteed to sink your sales pitch.

The magic realm of financial engineering may seem like a good fit for D-Wave. The quants who reside in this world will clearly understand where this company is coming from – many of these folks will have been lured away from a career in math and physics and there is no doubt that they could utilize a quantum optimization device to its fullest potential. That is, if this magic kingdom wasn’t on fire. Wall Street’s profits are up again, but on a shaky foundation, and the faith in the reliability of financial modeling has certainly taken quite a hit. (For a great account on this I recommend the hilariously named “Models behaving badly” book). This will certainly have reduced the appetite to gamble sizable amounts on - as of yet - untested technology (although sizable is of course rather relative when contrasted with the kind of volume that high frequency trading employs).

In the end, D-Wave's best option may be to lower the barrier for engaging with their tech, i.e.  by developing a stack of accelerator software that allows programs written in SAS or R to execute without modification in a hosted environment. That means engineering a pre-processor that diverts the invocations of proc nlp or optim() to an underlying D-Wave parser that compiles the optimization problems for execution on their hardware.

“Build it and they will come” is rarely a winning business strategy, but if D-Wave can make it effortless enough to test drive their optimization engine, then they stand a good chance to competing on the merits of their technology.

When they finally came ...

4 thoughts on “Time to start investing in quantum computing software?

  1. hey i like the post, i’m wondering, given that the first buyer for the D-Wave One System was Lockheed Martin, what do you think about potential applications in military and/or government operations? The image selection seems tailor made for spy satellite tech, but also the discrete opt. could be used for military tactics and engagement. I agree the consumer buyer front is FAR FAR AWAY but the fact that Lockheed put it’s purchasing power behind the product really makes me wonder exactly how the 128 and 512 qubit processors can be used to suit their needs? I guess the real question would be why did Lockheed Martin spend $10 million on the D-Wave One System? What do you they hope to gain and is it possible to offer that to other businesses?

  2. Certainly any new computing technology will eventually be used by governmental agencies and the military. On the other hand I would have expected them to already embrace quantum computing’s less glorified step sister technology i.e. quantum cryptography. There are already a couple of vendors in that realm and given the very real threat of cyber vandalism I really would like to see governments show a bit more zeal in securing their data and electronic communications.

    But I have to admit to some prejudice: In any given country I don’t expect the brightest minds to be attracted to military and civil service careers. Good modeling for optimization is hard. So I don’t really see these sectors to become early adopters of D-Wave’s hardware. The US maintains its military superiority by having created a huge private sector for its advanced weaponry. Having a military budget that is larger than the next 10 countries combined, these US based weapon system manufactures have deep pockets. Faced with some of the most challenging engineering tasks imaginable they also retain some serious talent, so I am not surprised that a company like Lockheed was the first to dive in. While $10M is not peanuts it’ll hardly make a dent in their R&D budget. To my knowledge there hasn’t been any official press release on what Lockheed is going to use the system for, but blog rumors have it that it is robotics related: I imagine linear programming like numerical solutions for differential equations or optimization of heuristic approaches such as artificial neural networks for controller systems.

    There will be a market for D-Wave in this kind of high tech engineering but I think it will pale in comparison to the sales volume that D-Wave could tap in the advanced Business Intelligence market (i.e. the one that actually lives up to the second word in this buzz term).

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