The pandemic has underscored the need for CIOs to invest in emerging technologies to both weather this storm and to build a foundation for recovery and future growth. This is evident by tech M&A activity that improved dramatically in the second half of 2020 -- hinting at optimism for the industry, as well as increased and potentially record-breaking levels of movement in the near future.
When it comes to prioritizing such investments, organizations often focus on the core technologies that we frequently hear about: AI, machine learning, 5G, and virtual reality. But there’s another player that has quietly joined the picture with the potential to offer a leapfrog advantage to entire industries -- quantum computing.
While few are currently generating revenue from quantum computing investments today, the technology is at a critical juncture and starting to move from labs to commercial experiments. Early adopters of this technology will have an opportunity to gain a foothold in the market and emerge as a quantum leader.
The below is a look at what CIOs and technology decision-makers need to know about quantum computing, the impact it can have on an organization’s post-COVID digital transformation strategy, and the early use cases where this emerging technology will have the biggest impact.
What is Quantum Computing?
As quantum computing technology is still at a very early stage, it can be difficult to define or quantify.
To understand what makes quantum computing unique, we must first look at classical computing, the likes of which make up our current digital landscape. These computers are based on “bits,” which represent either zeros or ones for programming, with an on/off type switch for logic reasoning.
However, quantum computers are programmed and coded using “qubits,” which can represent both zeros and ones simultaneously as data units, allowing quantum computers to be exponentially faster.
What does this all mean? In the coming years, quantum computers will likely far exceed the performance of today’s supercomputers and as such, will open entirely new opportunities for organizations.
The Use Cases
There are a number of verticals that will benefit as early adopters of quantum computing, including the following four:
- Financial services: For large banks and investment firms, quantum technology can help with accelerating statistical simulations, portfolio optimization, and machine learning to achieve lightning-speed trading, especially important in a time of market volatility, or for improved fraud detection.
- Biotech: The COVID-19 pandemic highlighted the importance of quick life sciences and healthcare research, particularly through advanced genetic and DNA modeling. Quantum computing can accelerate simulations exponentially to understand how a disease may be spreading or to support critical drug discovery.
- Chemical and energy: From optimizing power grids, enhancing predictive environmental modeling, or finding lower-emission sources of energy through chemical simulations, quantum computers can play a critical role in more efficient energy use.
- Artificial intelligence: Accelerated computing driven by quantum technology can lead to faster, more intelligent AI systems that can tackle large and complex problems at scale.
Steps for the Future
For CIOs determining what the next steps for quantum computing are, they must first consider the immediate use cases for their organization and how investments in quantum technology can pay dividends. For example, for an organization prioritizing accelerated or complex simulations, whether it’s for chemical or critical life sciences research like drug discovery, the increase in computing performance that quantum offers can make all the difference.
For some organizations, immediate needs may not be as defined, but there could be an appetite to simply experiment with the technology. As many companies already put a lot behind R&D for other emerging technologies, this can be a great way to play around with the idea of quantum computing and what it could mean for your organization.
However, like all technology, investing in something simply for the sake of investing in it will not yield results. Quantum computing efforts must map back to a critical business or technology need, not just for the short term, but also the long term as quantum computing matures.
CIOs must also consider how the deployment of the technology changes existing priorities, particularly around efforts such as cybersecurity. With an entirely new way of computing emerging, there will also be new ways for hackers to infiltrate critical systems. Cyber defenses will need to be quantum-proofed for the future and new standards will likely emerge.
Moving Forward with Quantum Computing
Investments in quantum computing will soon explode, offering organizations new ways to compute and ultimately fuel new discoveries and innovations. Whether building out quantum technology internally, partnering with other groups that are perfecting the process, or investing in quantum computing through M&A, organizations have several options to consider.
For early adopters, quantum computing holds tremendous promise -- including a first-mover advantage in making new, more targeted solutions with possible monetary benefits in the range of billions of dollars, not to mention the billions more that can be saved through proper data and intellectual property protection. This makes it paramount that CIOs jump on this opportunity early and in the right way.
Marc Suidan is the Technology, Media and Telecommunications Deals Leader at PwC US. Marc helps clients deliver shareholder value through deals, including realizing new revenue generation and cost savings, while protecting core value. He has advised corporate and private equity clients on over 50 deals in M&A diligences, integrations and divestitures.