As with traditional computing, quantum technology is developing along two distinct fronts – software applications and hardware. Developments in both areas are highly active, but the competing “horserace” aspects are entirely different.
Although many companies are developing software applications, and although they are seeking to develop those applications as soon as possible, their competition is not a true horserace because those applications relate to different things, for example, developments of pharmaceuticals, privacy and artificial intelligence.
In addition, their efforts are necessarily hindered at this time because, in the absence of quantum computers, they must be modeled using conventional computers. Thus, their race cannot reach the finish line until quantum computers are available to run, test and refine those applications. After that happens, one can expect that alternative applications will be developed to compete with proven applications that are commercially successful. So the winner of the first horserace for a particular application is only then likely to find itself in the true commercial horserace for acceptance of its offering in the market.
In contrast, the real technological horserace is in the development of quantum computing hardware.
The company, or consortium of companies, that develops the first commercially viable quantum computer will likely enjoy a commanding share of the market for a number of reasons. First, software applications will be written to run using the operating system for that initial platform, and software companies are unlikely to expend additional funds at the start to develop software to run on alternative platforms. Second, the acceptance of the first commercial platform will enable the developer to enjoy economies of scale in producing products to satisfy its market share, resulting in reduced cost – and pricing advantages over its competitors.
Third, the income it receives from its initial, commanding market position will enable it to invest profits in further innovations for its products, thus providing a superior, lower cost offering to customers..
Because these innovations relate to hardware, these companies will likely be able to protect their technology and market position from competition using patents using intellectual property. Thus, the winner of this race should find itself in a similar market position that Intel achieved in the PC market.
Who, then, is winning the hardware race? At this point, it is difficult to say because this race is a marathon, not a sprint. Thus, the current leaders at this early stage of development may not be the first to reach the finish line. Also, it is unlikely there will be a single leader because most companies in the field have partnered with other companies and research institutions to share their respective innovative capacities and financial resources. This is true even for major players like IBM, Google, Intel, Microsoft and Honeywell. Not everyone in the collaborative group that wins the race will benefit from the victory. Much will depend on the agreements about how they will share the rights and benefits with their collaborators.
For example, some of the victors may have the ability to exclude others afforded by IP rights, some may have the benefit of using the innovations in their new and growing business, and some may receive substantial royalty revenue streams from their contributions to the technology . It is also true, however, that some may have little to show because they have effectively “given away the store” to their collaboration partners through ill-conceived agreements.
The race to create the first quantum computers and quantum computer applications is a fierce one.
It is uncertain who will ultimately prevail. But it is certain that someone will prevail and, if properly protected by intellectual property and agreements concerning intellectual property, they will enjoy a substantial financial benefit from their innovations and from the commercial exploitation of their innovations.