Maritime companies have cracked Deloitte & Touche’s annual list of Canada’s fastest-growing IT companies for the first time this year.
Halifax-based Knowledge House Inc. and Bedford, N.S.- InfoInterActive Inc. are two of the 2001 Canadian Technology Fast 50 finalists, which recognizes both private and public IT companies. The program ranks them based on revenue growth during the last five years (1996-2000). The final rankings will be revealed in September.
Garry Foster, national director, technology and communications for Deloitte & Touche, says while he’s never sure who will make the list, there weren’t any surprises.
“There things that showed up on the list that were nice to see, i.e. we’re seeing a lot of growth in different areas of Canada, not just in different sectors, but in different areas,” Foster said. “We’re getting more and more companies from out West. We had our first two companies from the Maritimes hit the list. All of that is positive for the Canadian economy.”
Statistics show the IT wealth is being spread. While companies from Ontario comprised 48 per cent of the list, it marks the third year in a row the percentage dropped. Nova Scotia, Alberta and British Columbia all saw their stake grow. Manitoba, however, which had three companies in the top 50 last year, placed none. Toronto led the way with 11 entrants, followed by Vancouver (six) and Calgary (six).
Foster credited part of the increased growth to a maturing in the industry.
“If you start think about what you need to develop a technology cluster you need good education, which they’ve got out in Alberta, British Columbia, and they also have it in the eastern areas. You need an anchor tenant,” Foster said, “And I think they’re starting to get some anchor tenants. Out in British Columbia you’re got PMC Sierra, you got Pivotal, and that tends to spawn a lot of opportunities and new companies.”
Foster said there were 30 new finalists this year. Only two companies (Montreal-based BCE Emergis and Waterloo, Ont.-based Research in Motion) have made the list every year since the list’s inception in 1998.
“As companies get larger it becomes harder and harder for them to stay on the list,” Foster said.
“The bottom company on the list, I think, had over 700 per cent revenue growth over a five-year period. So it’s pretty tough for a company when they start to hit $50 million, $100 million in sales to maintain those types of growth levels.”
The top 50 came from every corner of the IT world — software, medical, computer peripherals and manufacturing, to name a few. Software, however, was the only sector to see its representation drop (from 62 per cent to 42 per cent). Foster said the software industry isn’t performing poorly, the other sectors are simply doing better.
In the late 1980s and early 1990s, the IT industry in Canada was driven by the strength of our software companies, according to Foster. Since then, he said, other industries like communications and networking have popped up and taken off.
As for next year’s list, Foster said he anticipates more of the same — with one exception. ” I would expect to see more Internet-related and e-commerce companies on there,” he said.