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Quantum computing is not speculative fiction—it's already happening, and potential applications abound in cybersecurity, logistics, risk management, and more.

Quantum computing may be difficult to explain, but that hasn’t stopped the technology from attracting widespread interest and billions of investment dollars. In the last three years, venture capitalists have invested $147 million in quantum computing startups, and governments have provided $2.2 billion globally in support to researchers.1

It’s not just academic research labs and startup companies getting involved. A growing number of enterprises are already exploring how to apply quantum computing to solve computationally intensive problems in finance, risk management, cybersecurity, materials science, energy, logistics, and more.

By harnessing the bizarre properties of subatomic particles, quantum computers will likely be able to perform certain kinds of calculations exponentially faster than the fastest computers currently known. Researchers predict this power will enable the technology to not only break current encryption systems, but also to discover optimal investment portfolios and help design new materials and industrial processes, to name just a few applications.

How Quantum Computers Differ

Whereas the fundamental unit of information in a classical computer is the bit, the analogous building block of a quantum computer is known as a quantum bit, or qubit. Classical computers use electrical charge to represent bits, but quantum computers take advantage of quantum mechanics rather than electrical conductivity. While the classical scenario represents data as 0s or 1s, qubits can be simultaneously 0 and 1 through a state known as superposition, promising great leaps in performance and efficiency.

The engineering challenges involved in building a quantum computer are formidable, however. A device created by D-Wave Systems, for instance, must operate in an enclosure carefully isolated from the outside environment at a temperature far colder than interstellar space. A typical qubit is also perishable: It maintains its state for perhaps 50 microseconds before errors creep in.

Researchers around the world are regularly announcing progress in tackling the engineering challenges of quantum computing, but mass production is widely regarded as years away. And fulfilling the potential of quantum computing depends on more than just building new hardware—new software and development tools will be critical as well.

Enterprise Applications

Financial services firms are notably active in quantum research today. For instance, Barclays and Goldman Sachs are both investigating the potential use of quantum computing in areas such as portfolio optimization, asset pricing, capital project budgeting, and data security. In aerospace, Airbus is exploring applications for designing new materials and new aircraft, while Lockheed Martin is investigating applications in verification and validation of complex systems.

The U.S. Navy, meanwhile, is paying for training in quantum computing and plans to develop algorithms for optimization problems such as data storage and energy-efficient data retrieval with underwater autonomous robots. NASA is exploring applications in communications, distributed navigation, and system diagnostics. Technology players such as Alibaba, Google, and IBM are working on applications such as hack-resistant cryptography, software debugging, and machine learning, while life sciences firms are seeking applications of quantum computing in personalized medicine and drug discovery.

Other organizations are eyeing applications in logistics, industrial chemistry, and energy that could be extremely valuable.

A Threat to Security

One area in which quantum computing is already having an impact is encryption. The most widely used techniques for encrypting and protecting transactions depend on the impossibility of swiftly finding the prime factors of large numbers, but quantum computing promises to make such calculations eminently possible. While it would take a classical computer 10.79 quintillion years to break the 128-bit AES encryption standard, for example, a quantum computer could conceivably break this type of encryption in approximately six months. This has led to a search for encryption methods that would be resistant to attacks from quantum computers—to make information systems “quantum-resistant.”

In 2015, the National Security Agency’s Information Assurance Directorate announced that it planned to begin guiding agencies and the private contractors that cater to them on transitioning to quantum-resistant algorithms. Public and private sector entities have already begun making plans to transition to so-called post-quantum cryptography.

Many enterprises are thinking about risks to their encrypted data even before quantum-enabled attacks become a reality. They are restricting access to or completely deleting sensitive data, even in encrypted formats, to prevent hostile actors from capturing that scrambled data with the hope of decrypting it with quantum computers in the future.

Where to Start

While mainstream commercial applications of quantum computing are likely years away, CIOs can do a number of things to begin to prepare their enterprises for the era of quantum computing:

Watch carefully. No one knows when quantum computers might become widely commercially available. To keep up with progress, CIOs can stay abreast of a few specific areas, including fundamental hardware engineering, quantum algorithms and software, and quantum “supremacy,” or the creation of a general-purpose quantum computer that can perform a task no classical computer can. Google, which has already announced a 9-qubit quantum computer, has published a paper suggesting its researchers believe that a planned 50-qubit computer could achieve that goal in the next couple of years.

Reimagine analytic workloads. Many companies regularly run large-scale computations for risk management, forecasting, planning, and optimization. Quantum computing could do more than just accelerate these computations—it could enable organizations to rethink how they operate, and to tackle entirely new challenges. It’s not too early to ask what would happen if computations could be done a million times faster—the answer could lead to new insights about operations and strategy. Meanwhile, quantum computing researchers have discovered improved ways of solving problems using conventional computers.

Update high-performance computing (HPC) architectures. Enterprises in industries such as aerospace and defense, oil and gas, life sciences, manufacturing, and financial services that have already invested in HPC can familiarize themselves with the impact that quantum computing may have. Hybrid architectures that link conventional HPC systems with quantum computers may become common. D-Wave has described an HPC-quantum hybrid for the simulation and design of a water distribution system, for instance; it uses quantum computing to narrow down the set of design choices that need to be simulated on the conventional system, with the potential to significantly reduce total computation time.

Explore academic R&D partnerships. It may be worth considering allocating R&D dollars to collaborations with an academic research institution working in this area, as Commonwealth Bank of Australia is doing. Research institutions currently active in quantum computing include the University of Southern California, Delft University of Technology, University of Waterloo, University of New South Wales, University of Maryland, and Yale Quantum Institute.

Create a long-range, quantum-era cybersecurity plan. It is not too early to begin planning to fortify cyber defenses against a quantum future. The National Institute of Standards and Technology recently assessed the threat of quantum computers and advised organizations to develop “crypto agility”—that is, the ability to swiftly switch out algorithms for newer, more secure ones as they’re released.

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Most CIOs will not be submitting budgets with line items for quantum computing in the next two years, but that doesn’t mean they should ignore this field. Investments in internal training, R&D partnerships, and strategic planning for a quantum world could pay significant dividends.

—by David Schatsky, managing director, Deloitte LLP, and Ramya Kunnath Puliyakodil, analyst, Deloitte Services India