Canadian tech market poised for growth in 2008, says IDC

Despite the slowing economy of its largest trading partner, Canada’s technology industry is poised for substantial growth this year.

End users are expected to spend no less than $81.5 billion in technology products and related services this year pushing local IT growth above that of the national GDP and the U.S. economy, according to a report by analyst firm IDC Canada in Toronto.

“There are opportunities in growing areas such as Web 2.0, unified communications and the wireless mobile technology,” said Vito Mabrucco, senior vice-president of worldwide consulting and managing director at IDC Canada.

Mabrucco presented IDC Canada’s Predictions 2008, a compilation of IT forecasts by the firm’s team of analysts, during a live Webcast on Thursday.

IDC expects the Canadian business telecommunications market to grow to an estimated $21 billion this year, followed by consumer telecom at $18.8 billion, IT service at $18.5 billion, hardware – $15.5 billion, and software – $7.7 billion.

Web 2.0

The IDC Canada report said companies should keep an eye on developments in the second generation of Internet-based technologies and trends also known as Web 2.0.

New online delivery technologies and the growing popularity of Web-based social networking among consumers have pushed Web 2.0 into the mainstream, the analyst firm noted.

“You need to know more about it – how to monetize it or how to use it,” Mabrucco said.

He said it’s easy to tell that Web 2.0 has hit the mainstream when companies such as Microsoft, Cisco, Sun, Open Text, IBM and RIM are promoting it.

An earlier IDC report had commented on how the IT market is being reshaped by developments in online delivery, community-based software development, solution-oriented packaging of software-as-a-service, free IT funding models and non-traditional entities such as YouTube, Facebook and Google.

Unfortunately, Mabrucco said, most businesses are still confused about Web 2.0. “They think it’s something that is packaged and bought.”


IDC also found that a large number of Canadian business managers are not doing their best to promote IT security and foster personnel training in the area.

“In 2008, security goes back to the basics. It will get worse before it gets better,” Mabrucco said.

Despite growing concerns over identity theft and attacks on databases, Canadian companies have done relatively little to improve competency in security, the analyst firm noted.

Green IT

Canadian firms are tackling environmental issues head on, said IDC.

The analyst firm found that 94 per cent of companies here intend to reduce their environmental footprint.

Key factors affecting this initiative include: financial savings, desire to protect the environment, a reshaping of corporate values, the need to meet regulations, and desire to present a cleaner image.

Mabrucco said there are opportunities in power conserving technologies such as heat and lighting sensors, video conferencing devices that reduce the need to travel, and global positioning systems that reduce traffic congestion.

Unified Communication

Voice over Internet Protocol (VoIP) is finally approaching critical mass as consumers and enterprise users obtain greater value out of existing products and services, said IDC.

These developments will continue to push growth in the unified communications field.

Among the top contenders are Cisco, Microsoft and Nortel.

Flexibility, Mabrucco noted, is the key to survival in this market.

Government adoption of unified communications technology is expected to exceed that of consumers, and at a federal as well as provincial level this technology will be used to improve operations.

Vendors need to meet user needs and expectations. “User acceptance will make the difference between success and failure in this field.”

Mobile advertising

As vendors continue to churn out wireless and mobile devices and technology, Mabrucco believes that mobile advertising is set to explode.

“Wireless advertising, while still in a nascent state, is a subset of the interactive Internet-based advertising market which is currently estimated to be worth about 5 per cent of the global ad business, or about US$16 billion,” ” he said.

Companies that can find the effective means to reach consumers through their mobile devices stand to reap great rewards, Mabrucco said.

In order to accomplish this, companies need to mine consumer data and create locally and individually targeted campaigns.

To differentiate their business from the competition, players must deliver ads and programs offering unique and desirable user experiences, the IDC analyst said.

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