By Michael Baczyk

On-Premise Deployments on the Rise

The past month alone has seen several significant deals that showcase the increasing adoption of on-premise quantum computers.

IBM announced that the Japanese research institute Riken has chosen to install an IBM Quantum System Two processor at its facility, which will be integrated with Riken’s Fugaku supercomputer. The project has attracted funding from Japan’s New Energy and Industrial Technology Development Organization (NEDO) and will involve collaborators such as SoftBank, the University of Tokyo, and Osaka University.

Meanwhile, QuEra Computing secured a substantial order worth 6.5 billion yen ($41M USD) from Japan’s National Institute of Advanced Industrial Science and Technology (AIST) to install a neutral atom processor at the institute’s Global Research and Development Center for Business by Quantum-AI Technology (G-QuAT) in Tsukuba, Japan. 

Rigetti Computing has launched the Novera™ QPU Partner Program to foster on-premises quantum computing by establishing an ecosystem of hardware, software, and service providers.  With a strong lineup of founding members and early sales to leading US government labs and Horizon Quantum Computing, Rigetti is well-positioned to advance on-premises quantum computing capabilities.

Other notable developments in 2024 include: IBM completed installation at Rensselaer Polytechnic Institute (RPI) and announced partnership with Korean Quantum Computing (KQC) to deploy quantum systems on their campuses. The Jülich Supercomputing Centre (JSC) has acquired a 5-qubit quantum system, the IQM Spark, from IQM Quantum Computers – set to go into operation in July 2024. Quantinuum’s H1 ion-trap quantum computer was chosen to be installed and operational by early 2025 at Riken. Aramco has partnered with Pasqal to deploy the first quantum computer in Saudi Arabia in the second half of 2025. PsiQuantum received funding from Australian government to deliver one million qubit machine in Brisbane, Australia.

Driving Forces Behind the On-Premise Quantum Computing Surge

The growing demand for on-premise quantum computing installations can be attributed to two key segments: machines intended for quantum hardware research and education, and those designed for application development and potential production. The former is primarily shipped to academic and research institutions, where customers may need to supply or change additional components, such as dilution refrigerators, to suit their specific purposes. On the other hand, machines intended for application development and potential production are predominantly shipped to High-Performance Computing (HPC) Centers.

Several factors are driving the current and future demand for on-premise quantum computing. 

  • Information security is a top concern, as organizations dealing with sensitive data prefer to keep their quantum computing operations in-house to maintain strict control over data access and protect intellectual property. Data residency requirements also contribute to the preference for on-premise deployments.
  • Another key factor is the presence of large workloads that can fully utilize a quantum computer. For organizations with extensive computational needs, dedicated on-premise quantum computing resources ensure optimal utilization and eliminate the need to compete for time on shared, cloud-based systems. This is particularly relevant for research institutions and businesses engaged in complex simulations.
  • Lastly, some organizations may be reluctant to have their jobs wait in a queue for access to shared quantum computing resources. On-premise deployments provide immediate and uninterrupted access, enabling faster iteration and accelerated progress in research and development.

Global On-Premise QC Expenditure Surpasses $400 Million

The global spend on quantum computing hardware has reached an impressive $426,081,827, with 49 deployments across various providers. This substantial investment showcases the growing interest in quantum computing’s potential to transform industries and advance scientific research.

IBM leads the pack, capturing 31.68% of the total spend, followed by D-Wave Systems at 14.67%. 

Other notable hardware providers include IonQ, Oxford Quantum Circuits, IQM Quantum Computers, Quantinuum, Rigetti, Alpine Quantum Technologies. While their individual market shares may be smaller, their collective contribution to the quantum computing landscape is crucial.

Adoption Trends Across Customer Segments

The distribution of quantum computing on-premise spending reveals distinct patterns among different customer segments. HPC clusters have emerged as the leading adopters, with investments totaling over $140 million. Following closely behind are R&D organizations, both in the federal and academic sectors. Federal R&D customers have invested nearly $100 million in on-premise quantum computing, indicating a strong interest from government agencies and national laboratories. Academic R&D customers have also made significant investments, totaling around $80 million. These customers are driven by the need to advance fundamental research, develop new quantum algorithms, and explore potential applications across various domains. Commercial R&D customers, representing private sector companies and industry research labs, have allocated approximately $55 million to on-premise quantum computing. This suggests a growing recognition of the technology’s potential to drive innovation and competitive advantage in fields such as drug discovery, materials science, and financial modeling.

Data centers have also emerged as significant adopters, with investments exceeding $20 million. As quantum computing becomes more accessible and integrated with classical computing infrastructure, data centers are positioning themselves to offer quantum computing as a service to their clients. This allows businesses to access quantum computing resources without the need for significant upfront investments in hardware and expertise.

Superconducting Qubits Dominate On-Premise Quantum Computing Deployments

Superconducting qubits have emerged as the dominant modality in on-premise quantum computing deployments, accounting for 47.9% of the total share due to the early-mover advantage and the IBM push towards deploying their QPUs. Following superconducting qubits, trapped ions and annealing-based quantum computers each account for 12.5% of on-premise deployments. Other modalities, such as spin qubits (8.3%), TBD (to be determined) systems (6.3%), photonic quantum computers (6.3%), neutral atoms (2.1%), and NV (nitrogen-vacancy) diamonds (2.1%), have a smaller but notable presence in on-premise deployments. 

Europe Leads the Global Quantum Computing Deployment Landscape

Europe has emerged as a leader in the global quantum computing deployment landscape, driven by strong government support, robust research networks, and a thriving ecosystem of quantum technology companies. 

North America, particularly the United States, also holds a prominent position, with major players like IBM and D-Wave at the forefront of quantum research, development, and commercialization. Asia, including China, Japan, and South Korea, has a notable presence, focusing on developing their quantum capabilities and fostering international collaborations.

While other regions, such as Africa, South America, and Oceania, currently have a smaller share of deployments, the global quantum ecosystem is expected to expand, leading to increased adoption worldwide.

The Future of On-Premise Quantum Computing

The past year has witnessed a marked increase in the number of on-premise installations and tenders, indicating a growing market appetite for quantum computing solutions. Some vendors, such as IonQ, are actively promoting on-premise deployments as a means to accelerate their revenue growth and establish a stronger foothold in the market.

However, the operational requirements of supporting non-local (pun intended) quantum computing installations present a significant challenge for vendors. Ensuring the availability of spare parts, regular maintenance, service technicians, and calibration processes is crucial to maintain the reliability and performance of these systems. Vendors that can effectively address these logistical and support challenges will be well-positioned to capitalize on the growing demand for on-premise quantum computing.

However, there are some open questions that we should continue to think about:

  • Will on-premise quantum computers provide a genuine return on investment, considering their current limited capabilities and the high cost of infrastructure?
  • How will the rapid pace of quantum computing advancements impact the long-term viability, scalability and maintainability of on-premise deployments?
  • What potential cybersecurity risks and vulnerabilities might arise from the integration of on-premise quantum computers into existing IT infrastructures?

Request access to the QC On-Premise Deployments at The GQI Intelligence portal provides access to interactive dashboards, allowing users to filter information by company names, modalities, and other relevant criteria. Additionally, the portal offers a wealth of insights through interactive playbooks, trackers, and expert commentary.

May 28, 2024