Honeywell, Cambridge Merge to Form New Quantum ‘Conglomerate’
Talent, resources and the heft necessary to move markets, Honeywell and Cambridge Quantum Computing (CQC) have entered an agreement to spin off a new standalone quantum company — the largest in the world of its kind. The new organization will marry Honeywell’s hardware know-how with Cambridge’s software to create a one-stop for companies, including the first quantum operating system.
Moving forward, Honeywell will own the majority stake in the new venture and invest around $300 million. Honeywell’s Chairman and CEO Darius Adamcyk will serve as chairman, Ilys Khan, the founder of Cambridge will be CEO and Tony Uttley, president of Honeywell Quantum Solutions will join the new company as president. The merger is expected to wrap up in Q3 2021.
Lawrence Gasman, President of IQT Research, predicts this will be the start of an industry-wide merger and acquisition spree, similar to what happened in the telecom space in the 1980s.
“This announcement creates a ‘conglomerate’ of sorts that plays in several different quantum markets, not just computing,” Gasman added. “It validates our belief that the emerging quantum industry is bigger than just computing and also potentially offers customers both the power of quantum computing and the power to protect data against quantum-hacked data.”
The goal is to start producing commercial quality quantum solutions built on Honeywell’s trapped ion-based hardware, however CQC will continue to develop hardware agnostic quantum software solutions.
“The new venture, which currently lacks a name, is the kind of new firm made up of merging smaller firms that we saw emerge in the telecommunications business in the 1980s and which ultimately have come to dominate the telecom industry,” Gasman said. “We think that the joint venture will also give both Honeywell and CQC new direction at a time when both would seem to need it. ”
But, he adds, many questions linger in the wake of the deal, in particular, whether Honeywell will switch up its cloud provider from Microsoft to IBM, which maintains close ties to Cambridge.
“Honeywell has utilized the Microsoft quantum cloud product; will it now switch to IBM’s quantum network?” Gasman asked. He added Khan, the new CEO is “impressive” and is excited to watch how the company will evolve.
“Joining together into an exciting newly combined enterprise, HQS and CQC will become a global powerhouse that will develop and commercialize quantum solutions that address some of humanity’s greatest challenges, while driving the development of what will become a $1 trillion industry,” Khan said about the new venture. “I am excited to lead a company that has the best people and technologies in the quantum computing industry and the best and boldest clients. Together we will lead the industry as it grows and matures, and create tangible, credible, provable and science-led advances.”
Adamczyk said he thinks the new company will be able to “…create value in the near-term within the quantum computing industry by offering the critical global infrastructure needed to support the sector’s explosive growth.”