Toronto promotes its role as cluster of technology talent

When companies like Adobe and MasterFile want to find out who’s using their images illegally, they don’t hire a team of PR people to scan newspapers and magazines. Or at least, they don’t anymore. Instead, they turn to the services of a Toronto-area company recognized as a leader in the field of image recognition.The firm, Idée, Inc., has developed software that scans a variety of media, whether print, disc or online, to detect where client images have been used even if they’ve been altered in any way.

“We started the company mainly to tackle one extremely big problem: how do you recognize and track an image even though it has been modified?” says Leila Boujnane, Idée’s CEO. “If you take an image and it has been used, how do you find out where?”

The software works much like search technology for text, but instead of a word, an image is used as the key. “It comes out of the same field as biometrics and a lot of technologies used in the medical field for examining cells and things like that,” Boujnane says.

The company, which was founded in 1999 as a two-person startup – Boujnane and CTO Paul Bloore – has grown to a staff of about 21, and revenues have grown a thousandfold, largely due to the increasing need for companies such as clients Adobe and Masterfile to control their intellectual property. But the software has only been available commercially for a couple of years. The company was focused on R&D until about 2005, Boujnane says. Since then, “it has just gone mad,” she says of the uptake in business.

But Idée is hardly unique in Toronto.

The region is home to approximately 3,300 ICT businesses that employ about 150,000 people, and is North America’s third largest ICT cluster (San Francisco and New York are first and second, respectively). That might surprise some who assume that Kitchener-Waterloo and Ottawa are the country’s biggest IT hubs.

The city is quickly becoming the source of some of the most innovative technology in the world, although not quickly enough for some, which is why the City of Toronto is hosting Toronto Technology Week (TTW) from May 28 to June 1.

Big goal
Dave Forde, chair of TTW, says the city has long been searching for ways to bring the area’s diverse IT community together. It formed an ICT advisory committee comprised of not- for-profits, schools, government and the private sector, and put together a strategy to help transform Toronto into one of the world’s five most innovative, creative and productive locations for ICT research, education, business and investment by 2011.

TTW, which will feature some 20 to 30 events, doesn’t have a single goal or objective other than to provide a chance for industry members to network and learn about each other, Forde says. But he expects it will have far-reaching impacts as well.

“Celebrating the successes of local companies keeps them here, but it also keeps that global spotlight on Toronto,” says Forde.

What that global spotlight will illuminate are firms such as Impact Mobile, Route1, BlueCat Networks, Encelium Technologies Inc. and Bioscrypt, to name a few.John Ruffolo, national leader, technology, media and telecommunications at Deloitte, says the growth is becoming evident by the number of firms applying for Deloitte’s yearly Fast 50 technology awards, which rank the fastest-growing Canadian tech companies based on percentage revenue growth over a five-year period.

A decade ago, the GTA was dominated by software firms, mostly in the enterprise space. But that has changed over the last three years or so, he says.

“Many of those software companies that were dominant or around in the 1990s either have been sold or are no longer around,” says Ruffolo. “The newer ones emerging tend to be from the newer sectors, so wireless is becoming much bigger, as are the green technologies, and we’re starting to see more digital media type of companies.”

Green team
One of the green tech firms emerging from the GTA is Encelium Technologies Inc.

Encelium, says CEO Terry Mocherniak, has designed a software-based lighting control system that enables building managers, for example, to control every light fixture in a building individually. It also allows for functions such as daylight harvesting, in which lights are dimmed in response to the detection of natural light, and loadshedding, which reduces energy consumption from lighting, based on pricing signal, to shave peak demand.

“We typically can save (customers) about 65 per cent of their lighting energy, even in the newer, most efficient buildings,” says Mocherniak. Lighting is typically the largest portion of a building’s energy costs, at approximately 35 per cent, he adds.

Encelium, which was founded in 2001, first started selling its product in early 2004. Since then, revenues have increased tenfold. It recently retrofitted Toronto’s SkyDome with the technology.

“Most of our marketing is done to the green building industry,” says Mocherniak.

Impact Mobile, meanwhile, is representative of the new media companies starting to dominate the local IT horizon.

The company, which was founded in 2002 – a time when there was pretty much nowhere else to go but up, says president Gary Schwartz – provides carriers, global agencies and branding firms ASP self-service marketing platforms for any aspect of their mobile marketing requirements.

“When a consumer needs to reach out to a brand or service, we provide the back-end ASP platform to facilitate that for companies like Coca Cola or Universal Press Syndicate,” he says.

Impact, which is in the midst of launching its mobile ticketing platform, has been profitable from inception, says Schwartz, a reflection of its focus on developing products driven by customer demand.

Sometimes, though, the most innovative companies are born out of the need to fulfill their own requirements. Such was the case with BlueCat Networks, a vendor of network appliances.

CEO Michael Hyatt, who founded the company in 2001 along with brother Richard, says the company came about when the two were looking for a DNS server for a current project. What was available on the market was expensive and limited in functionality, so the pair decided to come up with one of their own.

“When we came into the market with our own appliance in 2001, there were no budgets, there was no venture capital funding, no one was investing in technology. Everybody was trying to hold up their pants, everybody’s stocks were plummeting, and funds were losing billions of dollars, so we didn’t try to raise any money,” says Hyatt. “We started building appliances, and we literally screwdrivered them in ourselves and shipped them out with a bubble sticker on them.“We never raised any capital – we owned it, and we built it on amazing customer service,” says Hyatt. “We built it from the bottom up, and I don’t think there are any other companies around that have gotten to our size without venture capital.”

Route1, a vendor of security and identity management products, has a similar story.

“I had spent most of 2002, 2003 looking to raise venture capital . . . the ability for VCs to place money was low, to the point that, at end of the exercise of raising capital, we were interviewing the VCs before they were allowed to interview us to see if they had money,” says CEO Andrew White.

The firm survived, and thrived, however. Its Mobikey technology enables users to securely access their digital resources via a number of hardware platforms and the Mobikey service.

“In the past, people would have equated Mobikey to a USB drive device with software on it,” says White. “What we’re doing now is separating everything so Mobikey is now a hardware platform. The analogy is, if I go into a Rogers store and buy a cell phone, it’s useless until I put a service on it, and that is the same with Mobikey.”

Toronto is also home to a number of companies focusing on innovative security technologies. Bioscrypt Inc., for example, recently debuted the world’s first 3-D facial recognition technology.

Matthew Bogart, director of corporate development, says the firm was generating less than $500,000 in revenue in 2000. As of year’s end 2006, it had grown some 6,000 per cent, with about $18 million of business. It now has offices in the U.S., U.K. and Moscow, selling to organizations such as the U.S. Department of Defense of defense and Canada’s CATSA.

“What we’re looking at is the unification of access controls, and building an infrastructure that will allow organizations to manage the identities of the individuals across the enterprise, rather than having silos for physical and silos for logical access,” says Bogart.

Despite their differences, Toronto’s IT community shares one thing in common: its view on how setting up shop in the city serves its needs.

“The talent pool is a lot larger here,” says Route1’s White. “At this point we’ve found the developer community is phenomenal and there is really no reason to go elsewhere.”

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Jim Love, Chief Content Officer, IT World Canada

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