Canada's Top 300

Written by Branham Group

It was a year of change both in Canada and internationally. In 2006 our nation elected a new party into parliament, and war continued to affect the state of the world and the economy. With business processes costing more each year, companies have started to look toward India and China and also to Canada to help accomplish major business objectives. The year was another successful one for the Canadian IT sector, proving there is a continuing upward trend amongst the nation’s top IT companies. Industry Canada reports that since 2001, the Canadian economy has grown by 14 per cent, while the ICT sector’s GDP increased by 27 per cent—proving Canadian IT companies, as a whole, have been performing strongly throughout
this period.

The Branham300 saw changes resulting from mergers and acquisitions, new technological trends and new participants, while the many large players that traditionally top the list maintained their strong performances. This year’s entrants to the Branham Top 250, composed of 48 per cent private and 52 per cent public companies, produced total revenues of $65.4 billion—a 10.72 per cent increase over last year’s total of $59.065 billion. The average revenue growth rate for a single company on the Top 250 dropped to 25.66 per cent this year from last year’s solid 33.75 per cent, which can be attributed to the handful of significantly higher revenue growth rates seen last year. However, this did not affect the strong cumulative revenue performance seen in this year’s edition.

Cross-country Results

From a geographic perspective, the composition of the Top 250 is similar to that of last year. Ontario companies make up 55.6 per cent of the list (on par with 55.8 per cent last year), while the percentages of British Columbia and Quebec companies have risen (last year they accounted for 14.5 per cent and 14.1 per cent, respectively). Alberta companies comprise 9.6 per cent of the list (down from 11.6 per cent last year).

When analyzing the revenue breakdown of the Top 250 by province, the results line up with the geographic breakdown. Of the total $65.4 billion in cumulative revenues for all Top 250 companies, Ontario companies represent 64.4 per cent, Quebec represents 18.9 per cent, B.C. represents 11.5 per cent and Alberta companies make up 2.6 per cent. While these numbers represent the percentage of total Top 250 revenues contributed by each province, the year-over-year revenue growth per province shows a different picture: Ontario saw an 8.68 per cent increase, Quebec produced almost 4 per cent more in revenues, B.C. had a 17.44 per cent increase and Alberta came out strong with almost 28 per cent year-overyear revenue growth. While Ontario and Quebec produced more revenue in total, it is evident companies in Alberta and British Columbia produced higher revenue growth rates.

When comparing the average revenue per company for each province, it is interesting to note Quebec produced higher revenue per company than Ontario, due to the strong revenue generation of the province’s top companies such as BCE and CGI Group.

Hardware top performing category

The Top 250 is comprised of four major categories: Software (105 companies), Professional Services (65 companies), x Service Providers (34 companies) and IT Hardware and Infrastructure (46 companies). While software companies reflect the largest portion of the Top 250 companies, they contribute the least amount of total revenues, with a total of $4.1 billion. The xSP category saw the highest year-overyear growth in total revenues with a 12.17 per cent growth, bringing 2006 total revenues to $21.2 billion. While the Software category did well with solid 11.41 per cent growth rate, the Professional Services category , with revenues of $7.4 billion, did not fare as well with only 5.52 per cent growth. However, it should be noted that certain infrastructure-related service companies are categorized in the IT Hardware and Infrastructure segment.

The IT Hardware and Infrastructure companies (the largest revenue-generating category with $32.58 billion) had year-overyear growth of 7.34 per cent. It is interesting to note that Industry Canada reported 4.2 per cent growth for computer equipment manufacturers in the third quarter of 2006—after a stagnant first two quarters of the year. Further evidence of slow growth is characterized by large IT Hardware companies like Nortel having only an estimated two per cent year-over-year growth.

The top 10 Canadian IT companies stayed relatively the same when compared to last year’s list. Nortel, Celestica and BCE remain the top three, respectively. While these companies have presented smaller growth rates, there were some notable year-over-year revenue growths experienced by firms in the top 10 such as TELUS (13 per cent), Rogers Wireless Communications (18 per cent), ATI (10 per cent and making its final appearance on the Top 250) and, most notably, Research In Motion (with 54 per cent year-over-year revenue growth). While RIM’s revenue growth is not near its 2005 number of 127 per cent, it still showcases the continued worldwide demand for Canadian wireless products.

Significant Trends

Last year helped to shed light on some important trends such as Voice over Internet Protocol (VoIP), outsourcing and health care ICT. While these trends have definitely developed over the course of 2006, new trends and niches have gained prominence throughout the year, and we can expect to see both new and old companies catering to some aspects of many of these trends.

Significant trends in 2006 (as well as those expected to have impact in 2007) include:

adaptive security, to provide consolidated system management with the leveraging of information for compliance purposes
platform and resource virtualization, to allow cost savings through simulation
on-demand software/SaaS (software as a service), hosted software solutions that help reduce software maintenance costs while ensuring the most up-to-date products
Unified Messaging and Communications that enable multiple communications media to be received at a single point of interaction.

In addition to these trends, the Internet has seen developments related to collaboration, while social networking sites and wikis have become popular, offering collaboration and social settings for Web users. Related technologies like RSS feeds, used to publish digital content, are also seeing further interest and development. The creation of the RSS Advisory Board is an example of this.

Finally, the health care ICT sector is of great importance internationally and nationally now more than ever due to the requirements of the aging baby boomer generation.

Top 25 Multinational Companies

Foreign multinational companies operating in Canada are an integral component of the nation’s IT landscape. These organizations help create competition, as well as partnerships, with many Canadian organizations. These companies also create employment for talented people in Canada, and encourage growth and innovation within Canada’s IT sector. This year’s Top 25 Multinational Companies list saw the return of the top five heavyweights from last year: IBM, HP, Microsoft, Cisco Systems and Xerox. In addition, there were three newcomers to this year’s list—Motorola, Ericsson and Apple—each producing solid Canadian revenue growth in 2006.

IBM Canada produced roughly the same revenues as last year, placing it in the number one spot amongst Canadian multinational companies. The company produced an estimated $5 billion in revenues and was involved in a variety of interesting activities. A number of these were in the health care and law-enforcement sectors. The company teamed up with the University Health Network to develop a solution to analyze protein interactions, enabling health professionals to better understand cancer biology and treatment. IBM also signed a $10 million contract with the Alberta government to deploy a new electronic health records system and helped the City of Cape Breton in N.S., with a new research technology solution that automates the capturing and sharing of crime evidence.

Microsoft Canada, the number three ranked multinational this year, produced estimated revenues of $1.55 billion—a yearover-year increase of 29 per cent. Microsoft continues to excel in Canada, one of its key markets. Microsoft Canada has a wide range of accounts in Canada including The Canadian Institute for the Blind, Public Health Agency of Canada, RBC Financial Group, Shoppers Drug Mart and WorkSafeBC. Microsoft has also been very proactive in building a network of .Net professional services and products companies.

Oracle Canada produced the highest year-over-year revenue growth rate of all the Top 25 Multinational Companies. It earned $550 million in Canada, an increase of 51 per cent over its 2005 result of $365 million. This significant increase in revenue comes from a nucleus of initial and ongoing projects with a range of clients from different industry sectors, such as Petro-Canada, Bank of Montreal, TD Bank, Nissan Canada and Hudson’s Bay Company.

Other companies returning to the list that have shown significant revenue growth include Sun Microsystems Canada at 18 per cent, Symantec Canada at 41 per cent, SAS Canada at 31 per cent and Primus Telecommunications at 25 per cent. This year’s new companies have provided significant revenue growth figures as well. Motorola Canada produced an estimated $952.6 million in revenues with 20 per cent year-over-year revenue growth, while Ericsson Canada made an estimated $610 million with 13 per cent year-over-year growth. Apple Canada produced the highest revenue growth of the newcomers with 39 per cent, earning an estimated $768 million in revenues in 2006.

A strong list of foreign multinational companies was operating within Canada in 2006, with 80 per cent of the entrants producing revenue growth in the year. It is expected that these companies will continue to make a significant contribution.

Top 20 Movers and Shakers

The Top 20 Movers and Shakers list represents the companies that, through remarkable performance, showed the most significant increases in their rankings compared to last year’s list. Overall, this year’s Movers and Shakers produced cumulative revenues of $791.3 million, a 104 per cent increase over this group’s 2005 total revenues of $388.1 million. The average growth rate for a single company on this year’s Top 20 Movers and Shakers list was 101.2 per cent. It is interesting to note many of these companies are involved in fields identified as key trends in 2006, further demonstrating how firms involved in these important initiatives are gaining success.

Verb Exchange is this year’s number one Mover and Shaker with year-end revenues estimated to be more than $15 million, a 202 per cent increase over 2005 revenues of $5.1 million, and a move up the list by 100 spaces to 135th overall. Verb Exchange is a clear example of the success of VoIP. The company provides various solutions and services over “packetized networks” using advanced VoIP platforms. Products include a “virtual universal remote control” for voice and data tasks, as well as Tagline, a personal gateway for Unified Communications, allowing users to manage multiple communications from a single device. Verb Exchange leads the way this year for British Columbian Movers and Shakers, which comprise eight of the 20 companies on the list.

PlateSpin makes a return to the number two ranking on the Movers and Shakers list. The company moved 51 spots to number 130 on the Top 250 with year-over-year revenue growth of 173 per cent. PlateSpin provides advanced data centre automation software used to optimize server resource usage, employing solutions such as server consolidation, virtualization and disaster recovery.

New to the Movers and Shakers list this year is Whitehill Technologies from Moncton, N.B. The software company specializes in business process integration, document composition and data transformation, serving customers predominantly in the legal services and insurance markets. Whitehill served its 1,000th customer in 2006. The company moved up 48 spaces to number 95, with yearover-year revenue growth of 142 per cent.

Other Movers and Shakers that saw significant revenue growth include Camilion Solutions (130 per cent), Wellpoint Systems (113 per cent), Versatile Systems (167 per cent), Eloqua (105 per cent), Sierra Wireless (104 per cent) and Brainhunter (119 per cent). The appearance of these companies on the list shows the diverse breadth of IT segments that have experienced significant growth and ranking changes on the Branham300. From wireless solutions to IT staffing, and from specialized process software to Voice over Internet Protocol, Canadian companies are excelling in multiple fields of information technology.

This year’s Movers and Shakers characterize the trends that were gaining ground in 2006 and continue to show prominence and importance in 2007. From health care IT companies like Navantis to IT security specialists like Absolute Software, the Movers and Shakers work to create innovative and crucial solutions in today’s most important information technology fields.

The Top 10 Growth Companies list ranks the Top 250 companies that have had the highest year-over-year revenue growth and includes new companies that were not part of the Branham300 last year. The Top 10 Growth list includes four such companies: Peer 1, RAD International, BSM Technologies and Nightingale Informatix.

Peer 1 Networks Enterprises of Vancouver provides Internet infrastructure solutions such as co-location, self-managed servers and dedicated hosting to more than 15,000 customers. The company produced more than $70 million in revenues in 2006, with a 212 per cent year-over-year growth rate. Peer 1 offers a variety of interesting products and services, such as content delivery solutions that utilize the company’s international network, which spans 16 major cities in North America, as well as London and Amsterdam.

RAD International of Mississauga, Ont., specializes in mission-critical applications in fields such as Web services, DBMS, EAI and ERP. The company’s revenues grew by 156 per cent in 2006, earning it a number 211 ranking on the Top 250. RAD also specializes in product development, software porting and performance analysis.

BSM Technologies, which recently closed a private placement offering, provides vehicle tracking and surveillance solutions. The company’s solutions are used by law enforcement organizations in the fight against vehicular theft. Overall, BSM experienced 154 per cent revenue growth in 2006. BSM’s preliminary revenues for its 2006 fourth quarter were $1.3 million, a 395 per cent increase over the fourth quarter results of 2005 from sales in areas such as oil and gas, armored vehicles, commercial fleets and trailers.

Nightingale Informatix, an Application Service Provider of management services and solutions for the health care industry, grew by 124 per cent in 2006. The company provides a variety of solutions including Electronic Medical Records (EMR), claims processing, work flow tools, laboratory interfaces and realtime patient services. Recently the Ottawa Hospital Academic Family Health Team selected Nightingale as its EMR provider. The company’s electronic interfaces can link patient data, laboratory systems and the EMR systems, allowing a comprehensive medical management environment. Nightingale’s acquisition of a medical transcription company also assisted in revenue growth.

Top 25 Up and Comers

This year’s Top 25 Up and Comers once again come from a variety of IT segments and provinces. These young companies have differentiated themselves by creating innovative products and services in interesting fields of information technology. This Top 25 list is not a ranking of companies based on revenue; rather, it is a listing of companies Branham Group believes could be the next who’s who in the Canadian IT sector.

This year’s Up and Comers provide unique solutions. The hardware companies include hardware acceleration specialists, video processing firms and Radio Frequency Identification (RFID) solutions manufacturers. The software makers on this year’s list specialize in many technologies and vertical markets, such as airline information systems, oil and gas, water and climate, VoIP, medical systems and search engine technologies. Health care, security, infrastructure and planning were trends also seen amongst this year’s Up and Comers.

From a geographic perspective, the list has changed since last year, when Ontario companies comprised 76 per cent of the Top 25 Up and Comers. This year they come in at 44 per cent, indicating a more diverse national composition. We now see more companies from Quebec, Newfoundland, New Brunswick, Nova Scotia and the Northwest Territories appearing on the list. British Columbian companies comprise 12 per cent of the list this year (down from 16 per cent last year), and Alberta’s young companies constitute another 12 per cent (up from four per cent last year).

Top 20 Canadian Software Companies

The Top 25 Canadian Software Companies produced total revenues of $3.335 billion, a 1.9 per cent decrease from $3.4 billion, produced by last year’s list. While some companies experienced slower growth or revenue decreases in 2006, 12 of the top 25 companies experienced year-over-year growth of more than 10 per cent.

There was revenue growth among both the Top 25 and all 105 software companies reporting this year. The Top 25 of 2006 collectively produced total revenues of $3.335 billion, a 10.67 per cent increase from the $3.014 billion these 25 companies generated in 2005. Similarly, all 105 software companies produced $4.135 billion in aggregate revenues in 2006, an 11.41 per cent increase in 2006 from the group’s 2005 cumulative result of $3.7 billion.

While many of the companies in this category remained the same as last year, there were some changes. Cognos, Constellation Software, Open Text and Hummingbird have returned to the top five again this year. Geac is no longer on the list due to its acquisition, making way for Ottawa software company Corel to make an appearance amongst the top five software companies. Versatile Systems made a giant leap from number 24 last year to number nine this year, due to its 167 per cent year-over-year revenue growth. Another new company on the list is Logibec Groupe Informatique from Montreal—a health care software company that specializes in medical and clinical content integration. Logibec had year-over-year revenue growth of 37 per cent, placing it 17th overall.

Software companies account for 42 per cent of the Top 250 companies—up from the category’s 38 per cent contribution last year. Seven of the Top 25 companies are from Quebec (28 per cent), while 16 are from Ontario (64 per cent). British Columbia and New Brunswick each had one company in the Top 25 this year (representing four per cent each). In 2005, Ontario companies comprised 72 per cent of the Top 25 Software Companies, while Quebec and B.C. contributed 24 and four per cent respectively.

However, the provincial breakdown for all software companies shows the contributions of the other provinces as well. For all software companies in the Top 250, Ontario’s contribution is 44 per cent (down from 51 per cent last year), B.C. provides 19 per cent (up from 17 per cent last year) and Quebec 24 per cent (a significant increase from 16 per cent last year). It is interesting to note that Alberta contributes eight per cent (down from 11 per cent last year) of all software companies, though none appear in the Top 25.

The leaders in the Top 25 Canadian Software Companies list continue to progress and innovate through acquisitions, expansions and product creation. Cognos of Ottawa was the number one software company again this year with revenues of $1.02 billion and six per cent growth in 2006. The company gained new customers in 2006, including the City of Atlanta which purchased its Cognos 8 BI, software used to connect disparate data while also providing real-time access to it.

Open Text, a provider of Enterprise Content Management (ECM) solutions, had an interesting year due to its acquisition of Hummingbird (another ECM provider). Both companies are listed separately for the last time on the Branham300 due to the acquisition occurring after the fiscal year ends of both companies. While both companies saw slight reductions in revenues (Open Text’s revenues decreased by one per cent in 2006, while Hummingbird’s decreased by nine per cent), they each gained enough sales to jump one spot in the listing of Canada’s elite software vendors. Open Text continues to integrate Hummingbird’s products into its own. The company recently added advanced reporting and analytics capabilities to its Governance, Risk and Compliance solutions, and was selected by New Hampshire’s only academic medical centre to deploy Open Text Vista Plus, an Enterprise Information Management solution. Hummingbird had some notable events of its own during 2006. The company launched RedDot LiveServer 3.0, a content delivery and Web application integration solution, and a remote desktop access application for Linux.

Constellation Software of Toronto was the number four software company this year with an impressive 28 per cent year-over-year revenue growth that resulted in sales of $247 million in 2006. The company acquired firms in the local building and homebuilding markets.

Corel of Ottawa had the fifth largest revenues among the software firms with $207 million in sales and eight per cent revenue growth in 2006. Corel recently acquired InterVideo and Ulead.

Top 25 Professional Services Companies

This year’s Top 25 Professional Services Companies had steady performance in 2006, producing revenues of $7.075 billion, a decrease from the $7.2 billion produced by last year’s listed firms. The revenues from the Professional Services category account for 26 per cent of the Branham Top 250—on par with last year’s contribution of 25 per cent.

The geographic composition of the Top 25 Professional Services Companies has not changed considerably over the past year. Ontario represents 56 per cent of the list with 14 companies (up from 52 per cent last year), Quebec represents the same amount as last year with 12 per cent or three companies, Alberta comprises 20 per cent of the list with five companies (up from 16 per cent last year), while British Columbia and Nova Scotia comprises eight per cent and four per cent respectively. When we look at all of the Professional Services companies on the Top 250, we see that Ontario contributed 70 per cent of the total companies.

Comparing only this year’s participants shows revenue growth. A comparison has been made amongst all companies in the professional services category, the Top 25 companies and all professional services companies that were not in the Top 25 (called “All Other Professional Services Companies”). The Top 25 companies account for 95 per cent of the total revenues of the entire Professional Services category. Subsequently, the revenue growth rate for both groups is very close: 5.52 per cent year-over-year growth for all professional services companies, and 4.67 per cent for the Top 25 Companies. The proximity of these rates is mainly due to the strong performance of the top five professional services companies (CGI Group, MDA, xwave, Procom and CNC Global), whose combined 2006 revenues amount to $5.376 billion. Professional services companies that did not make the Top 25 (but were part of the Top 250) were companies that ranged in revenue from $3 million to $20 million and together produced a total of $372 million. It is very interesting to note the growth rate difference between this group and the Top 25 companies. While the Top 25 companies, as a whole, achieved 4.67 per cent year-over-year revenue growth, all other professional services organizations achieved a combined growth rate of 24.78 per cent, a substantial difference that characterizes the strong performance and importance of Canadian SMBs.

This year’s Top 25 Professional Services list is composed mostly of returning members, as well as some new companies. CGI Group, MacDonald, Dettwiler and Associates (MDA) and xwave return as the top three companies. While CGI Group incurred a reduction in revenues of six per cent, MDA had an estimated 22 per cent year-over-year increase in revenues. PROCOM was the number six professional services company last year, rising to number four this year. CNC Global, which was number nine last year, jumped to the number five position this year.

CGI Group of Montreal earned revenues of $3.477 billion in 2006, down from $3.686 billion in 2005, largely due to the challenges faced with the strength of the Canadian dollar as well as reduced BCE work volumes. However, the company positioned itself for growth through several successful contracts, including the extension of its outsourcing contract with Laurentian Bank, as well as additional contracts with the City of Calgary, British Columbia Ministry of Health and the Alberta Ministry of Health and Wellness.

MDA increased revenues by 22 per cent to an estimated $1.018 billion in 2006. MDA expanded its valuation solution in the U.K. through subsidiary xit2, introduced a new data marketing solution into the United States through its subsidiary DataQuick, provided a crime scene assessment solution to the Canadian government, and was chosen as the sole supplier of ground station solutions for DigitalGlobal’s international customers.

xwave experienced an estimated revenue decline of four per cent but still produced solid revenues, estimated at $340 million. It had interesting activity in 2006, including selection by the Workplace Health Safety and Compensation Commission as an IT partner and its joint contract with GE Healthcare to provide clinical management systems to Ontario physicians.

CNC Global, an IT professionals sourcing company, experienced 56 per cent year-overyear revenue growth, the strongest in the company’s 25-year history. CNC Global ended its 2006 fiscal year with $255 million in revenues.

Top 10 Canadian IT Security Companies

The Top 10 IT Security Companies have changed significantly since last year. The inclusion of Compugen, an infrastructure solutions provider with emphasis on the IT security space, has helped raise the cumulative revenues compared to last year’s list. However, the inclusion of the $270 million company was not the only factor. Eight of the top 10 companies experienced year-overyear revenue growth of more than 20 per cent, demonstrating the continuing importance of IT security to businesses and consumers.

The total revenue for this year’s group of Top 10 IT Security Companies is $425.9 million, an increase of 164 per cent over last year. When we compare the revenue growth only amongst the companies on this year’s Top 10 IT Security Companies list, the year-overyear growth only amounts to 9.75 per cent (the current Top 10 companies generated revenues of $388 million in 2005).

Compugen, a provider of IT infrastructure solutions and services, experienced a revenue decline in 2006 of one per cent but still produced impressive revenue results of $270 million (compared to last year’s $272 million). Cistel, a consulting and IT services firm, is another new addition and had year-over-year growth of 37 per cent. The other new entrants to this year’s Top 10 IT Security list are Radio IP Software (a mobile software provider which experienced 77 per cent year-over-year revenue growth) and BSM Technologies (a provider of vehicle tracking and surveillance solutions with year-over-year revenue growth of 154 per cent).

From a geographic perspective, Ontario once again contributes the largest portion of companies—60 per cent this year, compared with 50 per cent last year. Quebec companies comprise 20 per cent of the list (down from 30 per cent last year) while B.C. and Alberta firms once again comprise a combined 20 per cent (equal to last year’s results).

IT security is an ongoing concern for companies. While technologies evolve, new vulnerabilities and threats continue to emerge on a regular basis. Security companies face new tasks each year as they attempt to combat not only viruses, but also the planning that goes into IT-related attacks. A 2006 IBM study identified multiple threats which companies are now attempting to proactively deter, including software holes, flaws in Windows PnP implementation, Graphics Rendering Engine problems and reconnaissance activities by hackers, such as network mapping. This year organizations will see what types of new threats will appear, and what IT security firms can do to fight such attacks. Similarly, Symantec released its 2006 report, Pulse of IT Security in Canada, which highlights important security issues. The report shows how IT security is still rated as a top priority by more than 92 per cent of executives, with 74 per cent of these respondents taking proactive measures. Virus and worm infections are rated as the highest perceived threat, risking loss of data, revenue and productivity.

Top 10 xSP Companies

Canadian x-Service Providers (i.e. application, managed, wireless and Internet service providers) accounted for 14 per cent of the Top 250 companies this year, up slightly from 13 per cent last year. Ontario and Quebec contributed 30 per cent each to the Top 10 xSP list, while Alberta, British Columbia, Manitoba and Saskatchewan contributed one company each.

Similar to the Professional Services list, the Top 10 x-Service Providers contributed 97.4 per cent of the total revenues for all 34 xSP companies on the Top 250 (the top six companies alone made $19.9 billion in revenues). While the revenues for all xSP companies not in the top 10 amount to $551 million, when we look at the cumulative growth rate of this group it is a staggering 32.97 per cent compared to the 11.71 per cent growth rate of the Top 10 xSP companies.

The top three xSPs this year were BCE, TELUS and Rogers Wireless, with TELUS and Rogers switching spots from last year’s list. The exit of Aliant (whose operations relevant to the Branham300 were rolled into BCE revenues) allowed SR Telecom to make an appearance on the Top 10 xSP list. In addition, of all of this year’s Top 10 xSP companies, Cogeco had the highest yearover-year revenue growth of 30 per cent (producing estimated revenues of $148 million in 2006).

CE was the number one xSP again this year with estimated data and wireless revenues of $7.62 billion, up seven per cent from 2005 revenues of $7.101 billion. The company increased wireless subscribers to a total of 5.7 million by the end of the third quarter and attributed higher wireless revenues to customers making more use of various data services, text messaging, mobile browsing, gaming, bundled data offers and push-total talk service.

TELUS of Vancouver produced an estimated $5.47 billion in revenues in 2006, up one position on the list and up 13 per cent from the previous year’s result of $4.829 billion. The company reported interesting activities in 2006, including the deployment of a TELUS IP network to Saint Elizabeth Health Care, a five-year $6.5 million contract that will deliver a multi-site Internet Protocol infrastructure to help increase productivity and decrease communication costs. TELUS also extended its wireless highspeed roaming capabilities for mobile users to more than 230 U.S. cities. This is a service that will increase in popularity with business travellers. Other significant ventures include the launch of an “all-in-one” wireless medical database for health care professionals that delivers the most up-to-date medical drug and diagnostic tools on wireless handheld devices, as well as the introduction of a national wireless high-speed network in five major Canadian cities.

Rogers Wireless Communications moved to third place in the xSP category with estimated revenues of $4.258 billion and solid revenue growth in 2006 of 18 per cent. The company increased the number of postpaid wireless retail subscribers by 12 per cent and increased the number of residential high-speed Internet subscribers by 13.6 per cent. Rogers introduced the Call Manager in December, which allows customers to manage when and how calls are placed or received, stating it was the only national carrier to offer such control to customers. It also marked its five year implementation anniversary of the GSM (Global System for Mobile Communications) standard in 2006. In the past five years, global GSM subscribers have increased to two billion from approximately 500 million, while Rogers’ wireless subscribers have increased to 6.2 million from 2.7 million.

Top 25 IT Hardware and Infrastructure Companies

The Top 25 Canadian IT Hardware and Infrastructure Companies had a great year in 2006, producing cumulative revenues of $32.16 billion, a 7.31 per cent increase over revenues produced by this same group in 2005. Last year’s list produced a total of $27.89 billion, 15.31 per cent less than what was produced this year.

Nortel Networks, Celestica and ATI Technologies reprise their roles as the top three IT Hardware and Infrastructure Companies, with combined revenues of $25.6 billion representing 79.6 per cent of the entire revenue of this group. With AMD’s acquisition of ATI after the company’s 2006 fiscal year end, this will be ATI’s final year on the Branham Top 250 as a Canadian-owned company. Creo has made a departure from the list as it is now a fully owned subsidiary of Kodak. Research In Motion appears in the number four position, while Aastra Technologies jumped one spot to number five. Notable mentions also go to Sierra Wireless and March Networks, which experienced revenue growth of 104 per cent and 79 per cent, respectively.

The Top 25 IT Hardware and Infrastructure list includes several other new companies as well. Electronics manufacturing service provider SMTC Manufacturing appears at number eight with $290 million in revenue; designer and manufacturer of space hardware subsystems COM DEV is number 14 with 21 per cent year-over-year revenue growth; and EXFO Electro-Optical Engineering, provider of test and measurement technologies for the telecommunications industry, appears at number 15 with 32 per cent year-over-year revenue growth. Other new entrants include Cygnal Technologies, Vecima Networks, NBS Technologies and Memory Experts International (MXI).

This is another example in which the revenues category from the top companies contribute heavily toward the category total. In this case, the top 25 companies contribute 99 per cent of the total revenues of all IT Hardware and Infrastructure Companies on the Branham300 listing. The total revenues of all IT Hardware and Infrastructure companies that were not in the Top 25 were at $420 million with 9.92 per cent year-overyear growth.

Top 20 Tech in Canada, 1996

The Branham list has evolved to match the quick developments of Canada’s IT sector

Branham Group’s annual listing of Canada’s top IT companies has provided readers with a unique glimpse of the nation’s elite information technology (IT) firms for 14 years. The categories and number of companies have increased over the years, representing the continued maturity of the industry.

Ten years ago, there was no single ranking of the all the top IT (or ICT) Canadian companies, regardless of specialty. Rather, the Branham200 was focused primarily on four separate listings: the Top 100 Independent Software Firms, Top 50 Professional IT Services Firms, Top 25 Multinationals and Top 25 Up and Comers. Fifty per cent of the Branham200 coverage was focused on software companies. Ten years ago, the IT industry was really organized in silos.

Over time, buyer requirements started to change from point solutions to a converged solutions approach. The IT industry started to collaborate to meet these new customer requirements.

An example of this is the traditional telecoms that expanded their professional services capabilities to deliver communications as well as IT services.

Branham responded with the Top 250 Canadian IT Companies ranking and with additional categories (as you can see in this issue).

While software companies continue to produce the largest number of participants in the Branham300, the xSP category reflects the importance of mobile and Internet service providers as the use of cellular phone and Internet has skyrocketed since 1996. The growth of the mobile and Internet segments of companies such as Rogers and BCE proves the significance of this sector for both businesses and consumers.

ICT Hardware and Infrastructure companies have also proved to be some of the most important in Canada’s IT sector. Companies like Nortel Networks and Research In Motion have helped to create the largest revenue-generating category in the current edition of the Branham Top 250.

Since the mid-’90s, information technology has shifted from innovations in wire-line technologies to significant wireless developments. Similarly, the focus on IT security has become more proactive than reactive.

A decade of change in technology has led to the evolution of Branham’s annual listing of companies. The Branham300 continues to include Canada’s top software companies (including Cognos, whose revenues have increased almost fivefold in the past decade) and the nation’s top professional services organizations (like CGI, which generated close to $3.5 billion dollars in revenue in 2006), while also providing a more wide-ranging insight into the nation’s array of IT offerings.

The numbers from 1996

The numbers from 2006

Looking forward to $70 billion by 2008

The 2007 edition of the Branham300 has outlined how Canada’s top information technology companies have once again performed strongly. With the Top 250 producing $65.4 billion in revenues, this year’s group has shown solid revenue growth across a variety of IT segments while also demonstrating the breadth of skills and specializations that Canada has to offer. In addition, we have seen a significant focus on many important trends in the IT world today; namely, there has been substantial activity in the health care IT sector among companies of varying sizes and specializations (including foreign multinationals operating in Canada). As steps are taken to cover every aspect of this sector and other areas, such as wireless IT innovation and IT security, both corporations and governments will be expected to increase IT expenditures in the upcoming year. We look forward to seeing the Top 250 companies producing more than $70 billion in combined revenues next year.

The Branham300 listing, online application process, associated statistics and the creation of this article were combined efforts of the Branham Group with important contributions from Patti Saulnier, Sharon Hill, Andrew Bisson, Christian Gravelle, Wayne Gudbranson and Adnan Rahman.

How to get on next year's list

If your company is not included in this issue — and you think it should be — read on

The Branham Group selects 300 companies, out of more than one thousand, to be part of the annual Branham300 listing of top Canadian IT companies. The Branham300 is one of Canada’s most well respected rankings of Canadian IT companies. It is a unique list in that it integrates both publicly traded and privately held companies. Published annually in Backbone magazine and distributed with the Globe and Mail, the list is also online at www.branham300.com.

The Branham300 is composed of three key lists: the Top 250 Canadian IT Companies, the 25 Up and Comers and the 25 IT Multinationals. The 25 Up and Comers lists promising young companies that have incorporated in the last three years. These are not ranked on any financial metric such as FYE revenues but rather on an assessment of the innovative promise of products and/or services and an analysis of their market potential.

The 25 IT Multinationals ranks multinational companies based on FYE revenues, both domestic (Canadian) and any export revenues derived from a Canadian subsidiary and/or operations. Because the vast majority of multinationals do not delineate Canadian specific revenues, Branham often makes estimates based on various factors.

The third component, and the largest, of the Branham300 is the Top 250 Canadian IT companies. To be considered Canadian, a company must meet at least three of the following four criteria:

company was founded in Canada and its headquarters remain in Canada
more than 50 per cent of employees are located in Canada
corporate direction is set in Canada
more than 50 per cent of company research and development activities occur in Canada.

The Top 250 Canadian IT Companies encompasses four major categories: Software, Professional Services, ICT Hardware and Infrastructure, and x-Service Providers (mobile/wireless service providers, ISPs, ASPs and managed service providers). The Top 250 are further segregated in subcategories such as Wireless Solutions, IT Security and Healthcare IT.

If your organization is interested in being tracked for the Branham300, visit www.branhamgroup.com/application.

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Tech Now

Every Sunday, as part of its 6pm EST newscast, CJOH News airs its TECH NOW technology segment that features a look at the technology industry and how technolgy influences our lives and shapes the way we work, play and learn.

Wayne Gudbranson, Branham Group's President and CEO makes a regular appearance as an industry analyst. Watch the latest interview.

You will need RealPlayer to view these interviews. It can be downloaded free from www.real.com

Branham300 - Available Online

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