The market for quantum networking is projected to reach $5.5 billion by 2025, according to a new report from Inside Quantum Technology (IQT).

While all computing systems rely on the ability to store and manipulate information in individual bits, quantum computers “leverage quantum mechanical phenomena to manipulate information” and to do so requires the use of quantum bits, or qubits, according to IBM.

SEE: The CIO’s guide to quantum computing (ZDNet/TechRepublic special feature) | Download the free PDF version (TechRepublic)

Quantum computing is seen as the panacea for solving the problems computers are not equipped to handle now.

“For problems above a certain size and complexity, we don’t have enough computational power on earth to tackle them,” IBM said. This requires a new kind of computing, and this is where quantum comes in.

IQT says that quantum networking revenue comes primarily from quantum key distribution (QK), quantum cloud computing, and quantum sensor networks. Eventually, these strands will merge into a Quantum Internet, the report said.

Cloud access to quantum computers is core to the business models of many leading quantum computer companies–such as IBM, Microsoft and Rigetti–as well as several leading academic institutions, according to the report.

Microsoft, for instance, designed a special programming language for quantum computers, called Q#, and released a Quantum Development Kit to help programmers create new applications, according to CBInsights.

One of Google’s quantum computing projects involves working with NASA to apply the tech’s optimization abilities to space travel.

The Quantum Internet network will have the same “geographical breadth of coverage as today’s internet,” the IQT report stated.

It will provide a powerful platform for communications among quantum computers and other quantum devices, the report said.

And will enable a quantum version of the Internet of Things. “Finally, quantum networks can be the most secure networks ever built – completely invulnerable if constructed properly,” the report said.

The report, “Quantum Networks: A Ten-Year Forecast and Opportunity Analysis,” forecasts demand for quantum network equipment, software and services in both volume and value terms.

“The time has come when the rapidly developing quantum technology industry needs to quantify the opportunities coming out of quantum networking,” said Lawrence Gasman, president of Inside Quantum Technology, in a statement.

Quantum Key Distribution (QKD) adds unbreakable coding of key distribution to public key encryption, making it virtually invulnerable, according to the report.

QKD is the first significant revenue source to come from the emerging Quantum Internet and will create almost $150 million in revenue in 2020, the report said.

QKD’s early success is due to potential users—big financial and government organizations—have an immediate need for 100% secure encryption, the IQT report stated.

By 2025, IQT projects that revenue from “quantum clouds” are expected to exceed $2 billion.

Although some large research and government organizations are buying quantum computers for on-premise use, the high cost of the machines coupled with the immaturity of the technology means that the majority of quantum users are accessing quantum through clouds, the report explained.

Quantum sensor networks promise enhanced navigation and positioning and more sensitive medical imaging modalities, among other use cases, the report said.

“This is a very diverse area in terms of both the range of applications and the maturity of the technology.”

However, by 2025 revenue from quantum sensors is expected to reach about $1.2 billion.

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