Cloud-based Quantum Computing Market

Cloud-based Quantum Computing Market Size

The global cloud-based quantum computing market size is expected to increase from an estimated value of USD 798 million in 2023 to USD 4,063 million by 2028, At a compound annual growth rate (CAGR) of 38.5%. Increasing accessibility of quantum computers using cloud technology is one of the factors expected to contribute to the growth of the cloud-based quantum computing market.

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Cloud-based Quantum Computing Market Dynamics

Driver: Accessibility of quantum computers using cloud technology

The quantum computing field comprises aspects of mathematics, physics, and computer science and utilizes mechanics to solve problems. The time involved in solving complex issues is less than that of classical computers. Some applications where quantum computers can boost speed include machine learning, optimization, and simulation of physical systems. A cloud quantum computer is accessible in a cloud environment through a network. Quantum cloud computing enables users to connect directly to quantum processors, emulators, and simulators. Vendors provide programming languages and documentation for implementing quantum computing applications differently. Research and education are one of the verticals in which cloud-based quantum computing is utilized. Researchers use cloud-based quantum computing mainly to test their algorithms. Quantum algorithms are initially created on conventional computers and tested on real quantum computers via the cloud. Quantum computing has a high cost and technical barrier to entry; therefore, its deployment is limited. The systems are costly and time-consuming to develop, deploy, and maintain. Organizations already using quantum computing technology employ cloud-based quantum computing via their build platforms.

Restraint: Stability and error correction issues

Presently, quantum computers use error-prone physical qubits. It is estimated that 1,000 physical qubits are required to make a single logical qubit error-free. Till 2020, devices with 5,000 physical qubits have been developed. However, a commercially valuable quantum computer is expected to be a 200-logical qubit machine with 200,000 physical qubits. Commercializing quantum computers is a complex task. It is impossible to maintain the quantum mechanical state of qubits for a long time as they are delicate and can be easily disrupted by changes in environmental temperature, noise, and frequency.

Moreover, several blockchain-based technologies rely on the elliptic curve digital signature algorithm (ECDSA), which is currently not quantum-safe. Noise causes the information in the qubits to become randomized, leading to algorithm errors. The greater the influence of noise, the shorter the algorithm can run before it suffers an error and outputs an incorrect result. Instead of the trillions of operations needed to run a full-fledged quantum algorithm, performing dozens before noise causes a fatal error.

Opportunity: Growing adoption of quantum computing solutions across several verticals

Quantum computing is increasingly being deployed across different verticals. For instance, Accenture Lab’s and 1QBit collaborated with Biogen to develop a first-of-its-kind quantum-enabled molecular comparison application that could significantly improve advanced molecular design to speed up drug discovery for complex neurological conditions, such as multiple sclerosis. They collaborated to create a new application that enhances Biogen’s existing molecule comparison method with quantum capabilities. The new application provides novel insights into the molecular comparison process and much deeper contextual information about how, where, and why molecules match. Additionally, quantum computing is gaining traction in the banking, financial services, and insurance (BFSI) vertical, where companies increase the speed of trade activities, transactions, and data processing.

One of the potential applications of quantum computing is simulation. Quantum computing helps to identify effective and efficient ways to manage financial risks. High-quality solutions’ processing time and costs can increase exponentially if financial institutions use conventional computers. In contrast, quantum computers can carry out operations faster at optimized prices, resulting in cost savings and new opportunities for revenue generation. The increasing adoption of quantum computing in drug discovery and finance verticals drives the adoption of cloud-based quantum computing solutions.

Challenge: Lack of Standardization

Quantum computing is still in its initial stage, and software, hardware, and programming languages have no proper standardization, which means that different vendors may operate with several hardware architectures and programming models, making it difficult for developers and researchers to create software that works across other quantum computing platforms. Standardization enables better communication and collaboration across the quantum computing industry. Standardization can be implemented across different aspects of the quantum computing industry, including standards within quantum algorithms, hardware, and software. Standards within the technology development enable faster development and better benchmarking for the research and education vertical. Using standardized terminology in the quantum industry would lead to a common language allowing better internal and external communication with stakeholders. However, standardization should be made with exquisite care, as if wielded improperly, it can significantly hinder technology development.

Cloud-based quantum computing Market Ecosystem

By verticals, research and academia segment to hold the largest market size during the forecast period

Quantum computing is an area of research combing quantum physics and computer science. n Quantum computing research studies the physical limits of information processing. Researchers from academia, national laboratories, and the quantum computing field are expected to work together in the coming years to speed up the fundamental research related to quantum information science. Various partnerships are taking place in the cloud-based quantum computing market. In May 2021, IBM announced that it partnered with 11 top-tier academic institutions, including the IISc and IIT Kharagpur, to allow over-the-cloud access to its systems to accelerate advanced training & research in quantum computing. Companies in cloud-based quantum computing are taking several initiatives. For instance, IBM launched its Quantum Educators program,  which provides professors and students access to IBM quantum computers and the latest learning resources to help them schedule and experiment on quantum computers. Moreover, the Amazon Braket quantum computing service enables researchers at universities and national labs to perform experimentation with different quantum hardware technologies in one place.

By offering services segment to grow at the highest CAGR during the forecast period

Cloud-based quantum computing services use quantum computing technology to perform various tasks such as analytics, optimization, and simulation. These services are provided by cloud-based providers that offer access to quantum computing capabilities and resources. The key providers of cloud-based quantum computing services include IBM, AWS, Google, Huawei, Baidu, Microsoft, and others. Enterprises are adopting cloud-based quantum computing services to enable the efficient adoption of their solutions. Increasing the number of companies offering cloud-based quantum computing services led to its growing demand. For instance, IBM offers the Qiskit Runtime tool in the cloud-based quantum computing market. It is a quantum computing service and programming model for building, optimizing, and executing workloads at scale.

By services, professional services segment to hold the largest market size during the forecast period

Professional services are typically offered on-demand or are project-based. They provide various services, including digital transformation, business strategy, management consulting, data architecture and visualization, UX/UI design, and more. An organization uses professional services in areas such as consulting, cloud migration, deployment, and advanced troubleshooting, which are provided by consultants and industry experts by implementing cloud-based quantum computing technology.

By region, North America accounts for the largest market size during the forecast period.

North America is one of the most advanced regions regarding security technology adoption and infrastructure. Several standards and regulations also govern this region’s cloud-based quantum computing market. Implementing such private laws has prompted organizations to adopt cloud-based quantum computing solutions. Additionally, the region has witnessed several partnerships and initiatives between organizations and governments concerning cloud-based quantum computing in recent years. The National Quantum Initiative is one such governmental approach. It aims at ensuring the continued leadership of the US in QIS and its technology applications. The National Quantum Initiative was established by the National Quantum Initiative Act in 2018. The act was signed into law to accelerate quantum R&D for the economic and national security of the United States. Increasing initiatives and partnerships are taking place in the cloud-based quantum computing market by solution vendors. For instance, in 2020, D-Wave Systems announced the availability of free access to its quantum systems via the leap quantum cloud service for anyone working on responses to the Covid-19 pandemic. This initiative came as a response to a request from the Canadian government for solutions to the pandemic across industries.

Key Market Players

The major vendors in cloud-based quantum computing include IBM (US), Microsoft (US), Google (US), AWS (US), Baidu (China), Rigetti Computing (US), Xanadu (Canada), Oxford Quantum Circuits (UK), IonQ (US), and Zapata Computing (US).

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Scope of the Report

Market Segmentation

The study categorizes the cloud-based quantum computing market based on offering, technology, application, verticals, and region.

Offering

• Software
• Services
  • Professional Services
  • Managed Services

Technology

• Trapped Ions
• Quantum Annealing
• Superconducting Qubits
• Other Technologies

Application

• Optimization
• Simulation and Modeling
• Sampling
• Encryption
• Other Applications

Verticals

• Research and Academia
• BFSI
• Healthcare and Pharmaceuticals
• Aerospace and Defense
• Manufacturing
• Transportation and Logistics
• Chemicals
• Other Verticals

Region

• North America
• Europe
• Asia Pacific
• Middle East & Africa
• Latin America

Recent Developments

• In August 2022, AWS announced the general availability of Amazon Braket, a fully managed AWS service that helps customers explore and design quantum algorithms. It can be used to test and troubleshoot quantum algorithms on simulated computers running on computing resources in AWS to help them verify their implementation.
• In April 2021, AWS announced a partnership with the Hebrew University of Jerusalem. Through the AWS Cloud Credit for Research Program, AWS supports independent research using Amazon Braket at the university. Amazon Braket enables research organizations to explore quantum, classical high-performance computing (HPC), and quantum-inspired approaches to problems from the same console. In March 2023, IBM announced its partnership with T-Systems. T-Systems can now provide its customers with cloud access to IBM’s quantum systems, including multiple quantum computers powered by the 127-qubit IBM Eagle processor.

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