2014 in Review "Top 20Mover&Shakers" Branhan&Co Article
This is interesting article from Branham and Co.in regards to sector positioning by Transgaming Inc and the guidance outlook for 2014/ and beyond.
https://www.branham300.com/index.php
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Next on the Movers and Shakers list is NTG Clarity Networks who moved up 55 positions to rank 186 on this years Branham300 list. Following close behind are TECSIS and TransGaming who tied for third with a jump of 52 spots each. Rounding out the top 5 on the Movers & Shakers listing is The KTL Group, who jumped 50 spots up to 202 on the 250 listing."
"The Canadian ICT industry continued to show signs of stabilized growth in 2013 and this should continue well in into 2014. While much of this was fueled by those on the top half of the top 250 listing, we continue to look at the smaller and younger players, in hope that they will continue to push forward and fight to one day become that next billion dollar company."
Guess we'll know who is holding shares and who is not soon enuff.
SS
2014 Edition of the Branham300 – Canada's Top Tech Companies
The 2014 Edition of the Branham300 marks the 21st year of the listing. The Branham300 is the definitive listing of Canada's top publicly traded and privately held Information and Communication Technology (ICT) companies, as ranked by revenues.
Canada’s ICT industry continued to move forward in 2013, yet again setting another record with cumulative revenues for the Top 250 Canadian ICT companies increasing by 2.4% to $85 billion. Despite significant decreases experienced by Blackberry (-40%), Canada's top technology firm in 2013, Canadian companies have more than made up for the difference.
The 2014 Edition of the Branham300 consists of the following major listings:
The Branham300 also recognizes the leaders within each of the sectors of the Canadian ICT industry:
The list represents a snapshot of the companies surveyed at a specific point in time according to specific criteria. Where estimates were provided, these estimates have not been updated to reflect actual figures.
Canada's ICT Industry: A Year of Stabilization
Canada's ICT sector continued to carry momentum from 2012 into 2013. For the fourth consecutive year the Top 250 recorded growth and once again set record revenues of over $85B. Year over year growth improved to just over 2.4%, which represents another step forward for the Canadian ICT sector and another step away from the instability we saw before 2011.
Growth can be found throughout this year's listing with nearly 70% of those listed reporting increased revenues in 2013, and just under half (47.2%) of this year's top technology players posting at least double-digit gains in sales. Looking deeper into the growth rate of 2.4%, we can see how Canada's number one ranked technology company, BlackBerry, played a key role in under-inflating the overall grow of the sector in 2013.
In 2013 BlackBerry had another tough year, posting revenues of just under $11.8B, which represents a 40% decline year over year. BlackBerry accounted for 22.1% of the Top 250's total revenue on last year's listing, where in 2013 this representation drops to 13.9%. Netting out BlackBerry's revenue from the past two years actually shows that the Canadian ICT grew by 13.3%. Given the latest release of BlackBerry's FY2014 results, this will also have a very dramatic effect on next years listing as well, and perhaps may lead to a change in the top spot on the top 250, a spot that BlackBerry has held for the last 5 years.
Three out of the four major ICT sub-sectors also experienced growth in 2013. At the top of the leader-board is the ICT-Professional Services sector, which grew by 49.9%, followed by the Software and xSP sectors, with growth rates of 20.1% and 3.8% respectively. The only major sub-sector to post a decline was the ICT Hardware and Infrastructure sector (-20.3%). This decline however, can largely be attributed to BlackBerry's FY2013 results. More specifically, netting out Blackberry shows a 1.1% increase for the Hardware and Infrastructure sector overall.
Lastly, the geographic breakdown for 2013 revenues continues to be lead by Ontario, Quebec, British Columbia and Alberta. Similar to 2012, Ontario is the only one of these top four to post a decline in growth, falling 12% year over year; again, this is largely driven by the declines experienced at Blackberry.
Results by region
The overwhelming majority of Canada's ICT activity takes place in four of Canada's provinces. These four provinces – Alberta, British Columbia, Ontario and Quebec – represented nearly 96% of the Top 250 this year, as well as almost 98% of the Top 250's revenues in 2013.
The largest growth from these four provinces came from Quebec with a 30.65% increase in revenue, jumping from just over $19.12B in 2012 to $24.98B in 2013. A large portion of this increase can be attributed to the number 2 company on this years listing, CGI Group, which grew its revenues by over $5.3B.
Ontario, showing a similar trend to last year, was the only province to decline in overall revenue, falling by more than 12%. Again, this fall can be attributed to the significant decrease experienced by BlackBerry in 2013.
| Province |
2013 Revenues
($000) |
2012 Revenues
($000) |
Growth (%) |
% of Top 250
Revenues |
| Ontario |
$40,390,948 |
$45,949,529 |
-12.10% |
47.51% |
| Quebec |
$24,979,325 |
$19,119,708 |
30.65% |
29.38% |
| B.C. |
$12,995,040 |
$11,371,543 |
14.28% |
15.29% |
| Alberta |
$4,942,293 |
$4,723,370 |
4.63% |
5,81% |
Sector Performance
The Top 250 is broken down into the industry's four major sectors: Software, ICT Professional Services, ICT Hardware and Infrastructure and x Service Providers (xSP). For 2013, the ICT Professional Services sector in Canada, led by CGI again, saw the highest revenue growth, compared to each of the other industry sectors. ICT Professional Services saw total revenues increase by almost 50% from $12.3B in 2012 to $18.4B in 2013.
The Software sector, led by OpenText and Constellation Software experienced greater gains in 2013 (20%), well above the growth levels experienced in 2012 (0.3%). In fact, 10 companies on the top 25 Software listing, grew at a rate of 25% or higher in 2013 with two of those posting growth of over 100%.
The xSP sector, which holds 3 of the top 5 spots on the Branham300 listing, followed the ICT Professional Services and Software sectors with an overall growth rate of 3.8%; much lower then the 7.9% growth experienced in 2012.The ICT Hardware and Infrastructure sector in Canada was the only major ICT sub-sector to experience a decline in 2013, dropping 20.3% from $31.5B in 2012 to $25.1B in 2013. Due to the decline, the Hardware and Infrastructure sector remains in the number two position behind the xSP sector, which represents 41.7% of the overall revenue of the Top 250. The decline in the Hardware and Infrastructure sector again can be largely attributed to BlackBerry seeing a 40% decline in revenues for 2013.
| Sector |
2013 Revenues ($000) |
2012 Revenues ($000) |
Growth (%) |
% of Top 250 Revenues |
| xSP |
$35,455,731 |
$34,162,086 |
3.79% |
41.70% |
| ICT Hardware and Infra. |
$25,130,896 |
$31,546,875 |
-20.34% |
29.65% |
| ICT Prof. Services |
$18,411,138 |
$12,279,752 |
49.93% |
21.66% |
| Software |
$6,018,639 |
$5,013,384 |
20.05% |
7.08% |
Top Performers
The top ranked companies in each major industry sector from 2012 also maintained their first place rankings 2013. While each sector boasts a number of players that are recognized worldwide for their innovative offerings, the following are the companies that champion the face of the Canadian ICT industry.
Blackberry
BlackBerry was hoping that its new BB10 devices would help bring back some stability, however 2013 proved to be an even more difficult year for the company. Following a 7% decrease in 2012, 2013 showed no mercy, serving up BlackBerry with a 40% decrease in annual revenue. Peering into its latest financials for FY2014, BlackBerry continues to slide with significant losses.
The Big Three
Canada's three largest national telecommunication companies – BCE, Rogers Communications and TELUS – continued their dominance on the Canadian wireless and internet market in 2013. BCE and Rogers Communications posted marginal gains of 1% each with revenues of $9.45B and $8.4B respectively, while TELUS churned out an estimated 6% increase in wireless and internet sales to $9.30B.
CGI Group
The top spot in the ICT Professional Services category belongs once again (ten consecutive years) to CGI Group. During late 2012 CGI acquired United Kingdom-based computer services company Logica. With this acquisition, CGI Group holds a significant presence throughout the Americas, Europe and Asia, with a combined 68,000 professionals in 43 countries offering customers across the world a mix of business and technology expertise as well as a combination of local and global delivery options. This acquisition also helped CGI post significant gains in 2013 with a growth of 111%, bringing its revenues to over $10B. CGI also leaped over The Big Three and is now sitting in the number two spot on this year's Branham300 listing. With all of its momentum, the company is a serious contender to claim next year's number one spot.
Open Text
OpenText continues to build on its momentum from 2012, posting revenue growth of 13% in 2013. The enterprise content management leader continued pursuing acquisitions in order to further expand itself. The company made 3 acquisitions in FY2013, which included EasyLink Services International Corporation, Resonate KT Limited and ICCM Professional Services Limited. The acquisition of Easylink has given OpenText a presence in the cloud market, providing it with a fundamental building block and a data centre presence in 25 countries for software as a service and managed hosting.
The overall 5% growth that was seen last year by the companies comprising the multinationals list, fell to a 0.3% decrease in 2013. This year's multinational list is led by the likes of IBM Canada, HP Canada, Microsoft Canada, Cisco Systems Canada and Oracle Canada. All of these players are world-renowned technology firms, and have chosen to set-up significant operations in Canada, a true testament to the skill and technical ability of Canada's workforce.
Again, IBM Canada placed number one on this year's listing of the Top 25 Multinationals with operations in Canada, generating an estimated $5.59B in revenue, which represents a decrease of 12% from FY2012. A key acquisition in 2013 for IBM was that of SoftLayer. With a global strategy in 2014 to expand its cloud footprint and capabilities, IBM will be investing $1.2B to double its SoftLayer cloud hubs for businesses in order to meet growing demands.
In second place on the Top 25 Multinational listing again is HP Canada with estimated revenues of over $4.22B, representing an 8% decrease year over year from 2012 to 2013.
Moving up a spot from 2012, Microsoft Canada sits in third on the listing, growing 9% from 2012 with estimated revenues of over $1.96B. Fourth and fifth on the list go to Cisco Systems Canada and Oracle Canada with estimated revenues of $1.92B and $1.31B respectively.
Canada has shown time and time again that it produces some of the worlds best start-ups filled with talented individuals. Gaining more notice from the largest tech companies, many Canadian homegrown start-ups are getting purchased faster then ever.
The Top 25 Up and Comers listing represents bright young company's spanning across Canada, showing the combination of innovation, creativity and long-term potential for success. The company's landing on this years listing are on the leading edge and are pushing the limits in existing markets such as healthcare, security and education and paving the way in new areas like big data analytics, social and mobile gaming, digital media, and cloud computing to name but a few. Look for these companies to continue to make even bigger strides in 2014.
The Canadian x Service provider (xSP) category is comprised of application, managed, wireless and Internet service provider companies. Traditionally, the xSP category has accounted for a small percentage of Top 250 companies relative to each of the other major categories (Software, ICT Hardware and Infrastructure, and ICT Professional Services), but has contributed a significant percentage of the Top 250's total revenues. This trend continued in 2013, as the 32 listed xSP companies (12.8% of Top 250 companies) combined to generate $35.46B in revenues (41.7% of Top 250 revenues), a 3.8% increase compared to 2012. The leading players within the xSP market generate the overwhelming share of the sector's revenues, as the Top 10 xSP companies on this year's Top 250 produced a combined $34.8B in sales in 2013 (98% of the category's total revenues).
The Big Three continue to dominate this sector, all posting positive growth figures in 2013. In fact, BCE, TELUS and Rogers Communications are so dominant that the total of these three companies revenues make up nearly a third of the total revenues of the Top 250. BCE is ranked number 1 in this category with $9.45B in estimated revenues followed by TELUS and Rogers with $9.3B and $8.39B in estimated revenues respectively. Rounding out the top 5 players in this category are Shaw Communications with estimated revenues of just over $3B and Videotron with estimated revenues of just over $1.03B.
Moving forward to 2014, it will be interesting to see how some of these companies will fair, as wireless contracts can now only be 2 years long and wireless plan prices appear to be increasing. Also, despite complaints of lack of competition, The Big Three purchased 89% of the newly released 700MHz spectrum to further their grip on the industry. That being said, we see that some competitors, such as TekSavvy, are gaining more traction in the market, as demonstrated by their growth of 44% in 2013 and 64% in 2012. All of this to say, 2014 will be an interesting year for all xSP companies.
The Software sector, led by OpenText, experienced greater gains in 2013 (20%); results that are well above the growth levels experienced in 2012 (0.3%). In fact, ten companies in the top 25 Software listing, grew at a rate of 25% or higher in 2013 with 2 of those posting growth over 100%.
Further solidifying its status as Canada's largest independent software company, OpenText increased sales by 13% from $1.21B in 2012 to $1.36B in 2013. Playing a large part in this revenue increase was the acquisition of EasyLink Services International Corporation. This acquisition has given OpenText a presence in the expanding cloud market and will allow it to keep growing and be a major player for the foreseeable future.
Once again, sliding in behind OpenText for the number two slot in the Top 25 Software listing was Constellation Software. Keeping a similar acquisition strategy to 2012, Constellation Software acquired 21 companies in 2013, which helped propelled it to a 30% revenue growth from 2012 to 2013. Constellation Software has broken the $1B mark in 2013, posting revenues over $1.23B. With this type of growth and market strategy, the top spot for Software in 2014 will certainly be an interesting race.
Rounding out the top 5 Canadian Software leaders are Mitel, who posted revenues of almost $614M; Points.com, with $209M in revenue, an impressive 41% increase; and finally Enghouse, with just under $180M in revenue and an impressive growth rate of 32% year over year.
Top 25 ICT Hardware and Infrastructure Companies (Link to listing)
The ICT Hardware and Infrastructure sector once again saw some harder times in 2013. The sector as a whole, as well as the Top 25 saw a decrease of over 20% year over year. The 40% decline in BlackBerry's revenue can be attributed as a large factor in this.
BlackBerry had a tough 2013, despite still ranking as the number one company on the Branham300. It dropped to revenues of $11.8B in 2013, a 40% decrease. However, 4 out of the top 5 companies in this sector also posted year over year losses.
Celestica came in second on the ICT Hardware and Infrastructure listing, posting an 18% decrease in revenues. Similarly, SMART Technologies ranked fourth, posting a 21% decrease, while the fifth ranked Aastra Technologies dropped 7%.
The only company in the top 5 to post positive gains was third place CAE, which saw an increase of 16%, bringing its 2013 revenues to $2.1B.
Despite what seemed to be a tough year for this sector, there are some very positive notes to take away in terms of growth. There were a total of 8 companies in the Top 25 that posted revenue growth over 15%. DragonWave lead the way with a huge spike in revenue, increasing by 171%, followed by Avigilon with growth of 77%.
Top 25 ICT Professional Services Companies (Link to listing)
Compared to each of the other major sectors that comprise the Canadian ICT industry, the ICT Professional Services sector saw the best performance with respect to increased revenue year-over-year. The 89 sector companies landing on this year's Top 250 combined to produce $18.4B, up 49.9% from 2012. The Top 25 posted an even higher increase of 53.6%. This growth can be directly attributed to the growth of the top two companies on this list.
For the tenth consecutive year, CGI holds the top spot on the Top 25 ICT Professional Services Companies listing. With the acquisition of Logica in late 2012, CGI had a 111% increase in year over year revenues bringing its 2013 total to over $10.08B. CGI has really solidified its position as top dog and contender for the number 1 ranked company on the Branham300.
Following CGI in the number two spot is MacDonald, Detwiler and Associates (MDA) who moved up one spot from last year. MDA also experienced a significant revenue spike, growing 104% to estimated revenues of just under $1.8B. A key acquisition that helped lead to the growth of MDA in 2013 was that of Space Systems/Loral, Inc (SSL) in late 2012. This was also the first full year of reporting with ownership of SSL.
Falling one spot from second to third place on the Professional Services listing is Softchoice, posting a slight year over year decrease of 1%. Flip-flopping once again, Procom Consultants Group has grabbed back the fourth spot with its 2% revenue increase, sending OnX Enterprise Solutions to fifth place, with a 7% year over year decrease in revenues.
Top 20 Movers & Shakers and Top 10 Growth Companies
While growth can be found throughout this year's Branham300, several Canadian ICT companies surged ahead of the pack in 2013. The companies landing on this year's Top 20 Movers & Shakers listing ascended a combined 830 positions on this year's Branham300, while the industry's Top 10 Growth companies produced an average year-over-year increase in revenues of 686.7% with a median of 174%. There is no denying the fact that the Canadian ICT industry is home to some of the fastest growing companies in Canada.
Moving up 66 positions on the 2014 edition of the Branham300 from 253 to 187, the number one company on the Movers and Shakers is Appnovation – whose business specialty includes Drupal, Alfresco, Middleware, HTML5 and Big Data. Appnovation also made it into the Top 10 Growth listing, placing fourth, with a year over year revenue increase of 359%.
Next on the Movers and Shakers list is NTG Clarity Networks who moved up 55 positions to rank 186 on this years Branham300 list. Following close behind are TECSIS and TransGaming who tied for third with a jump of 52 spots each. Rounding out the top 5 on the Movers & Shakers listing is The KTL Group, who jumped 50 spots up to 202 on the 250 listing.
Smart Employee Benefits sits in the top spot for the Top Growth companies with annual growth of 3233%; attributed to a number of acquisitions. This is the first year SEB has made it into the top 250 but with such potential, this young company has a bright future and will be expected on the Branham300 for the foreseeable future.
In second place on the Top Growth companies list, is another company who is debuting on the Branham300. Toocoo Media posted a growth rate of 2000% from 2012 to 2013. The third ranked TeliPhone logged growth of 411% and in fifth, another first timer on the Branham300, Obero Solutions posted growth of 177%.
Alongside Appnovation, there are two other companies to make both the Movers & Shakers and Top Growth listings. In eighth on the Movers and Shakers, moving 43 spots and ranked sixth in growth at 171% is Ottawa-based DragonWave. In twelfth on the Movers & Shakers, moving 36 spots and ranked seventh in growth with 150% is Redknee out of Mississauga, Ontario.
2012 Trends and Developments
Several existing ICT industry trends continued to evolve over the past year, while market conditions prompted a few net new ones to emerge in 2013. The following provides a high level snapshot of what to look out for in Canada's ICT industry going forward in 2014.
Increasing Startup Activity and Investment
Today's Internet technology allows small companies to start on a bootstrap budget, with the number of startup companies continuing to increase. For example, with the culling of so many jobs by Waterloo's Blackberry, the area will be sure to advance as one of the country's most recognized hubs for technology and innovation. Not only are US companies establishing offices in the Waterloo area to tap into these newly available technical resources, but thanks in part to Waterloo's Communitech and the University of Waterloo's VeloCity startup incubators, the area has a bustling startup ecosystem.
Canadian tech startups are continuing to get more visibility as a result of business incubators from across the nation. Not only are more foreign venture capital firms taking note of Canadian startups, but investment by Canadian firms is also increasing, minimizing the requirement for companies to look south of the border.
Big Data
2012 was touted as a year for “Big Data”, which was exemplified by the number of Canadian start-ups and product releases. While there are some mixed statistics with respect to the number of companies that have already implemented or are planning on implementing Big Data solutions, there is still significant interest in this space.
Going forward, major advancements will continue to develop not only at the platform layer, but more specifically, in niche sectors, such as HR and Healthcare, amongst others. Expect to see several new players enter the spotlight in 2014.
The Internet of Things
RFID technology is not new. RFID provides unique identification for an object, be it a product, device, or individual (via wearable identifier). Moving from simple identification tags, device to device communication further allows information input and feedback without being wholly dependent on human beings.
With the ability to track these uniquely identifiable objects, many conversations quickly turn to “Big Brother” or targeted advertising. But there are a tremendous number of benefits and an even greater amount of opportunity. As new devices continue to roll out with enabling technology, solutions will no doubt flood the market over the coming years, furthering the advancement of this sector, and also as it relates to building the next generation of Canadian tech companies.
Closing Thoughts
The Canadian ICT industry continued to show signs of stabilized growth in 2013 and this should continue well in into 2014. While much of this was fueled by those on the top half of the top 250 listing, we continue to look at the smaller and younger players, in hope that they will continue to push forward and fight to one day become that next billion dollar company.
The success of our ICT industry is no small accomplishment. Proof of how resilient these Canadian companies are lies within the fact that the industry continued to grow even despite BlackBerrys 40% free fall in revenues. We should take pride in the resiliency of the Canadian ICT industry and how it demonstrates time and time again, with the new crop of companies that continue to work their way up the ranks and as others move on.
Canada is recognized as a world leader when it comes to this knowledge based tech industry; headlined by globally recognized leaders such as BlackBerry, Open Text, CGI Group, the Big Three Telco's, among many others. Coupled with the fact that several of Canada's major ICT sub sectors produced healthy growth in 2013, Branham forecasts that the ICT industry in Canada will continue to build on its successes in 2014 with mid single-digit cumulative growth.
Read more: https://www.branham300.com/index.php#ixzz3IcpkORvz