Canada Information Technology Industry Update Quarter 2 2012

  • April 2014
  • -
  • Business Monitor International
  • -
  • 70 pages

Includes 3 FREE quarterly updates

BMI View: Canadian IT spending is expected to reach US Dollar 3.5bn in 2012, up 4%, with BMI downwardly revising its projection due to expectations of a macroeconomic cooling in H112. Government spending will continue to be constrained by a focus on cutting costs, with cost reviews being conducted by Toronto and Ontario, but there have been a spate of large tenders, highlighting continued opportunities within the segment . BMI expects Canada's IT industry to continue to report moderate overall growth in 2012, although much will depend on the overall business environment.
Headline Expenditure Projections Computer hardware revenues : US Dollar 14.9bn in 2011 to US Dollar 15.2bn in 2012, +2.5% in US dollar terms.
Forecast in US dollar terms downwardly revised due to macroeconomic factors, although Canadian PC revenues reported positive growth in 2011.
Software revenues : US Dollar 9.3bn in 2011 to US Dollar 9.8bn in 2012, +5.3% in US dollar terms.
Forecast in US dollar terms upwardly revised due to analyst modification but given the large public segment deficits, vendors will need to provide clients with ways to reduce costs by increasing efficiency. IT Services revenues : US Dollar 2.14bn in 2011 to US Dollar 22.3bn in 2012, +4.5% in US dollar terms. Projection in US dollar terms upwardly revised due to analyst modification with the industry shaped by a continued move towards distributed computing and service-oriented architectures.
Risk/Reward Ratings: Canada's score was 70.7 out of 100.0.
Canada ranks second in our latest RRR table, behind the US, but still ahead of Latin American giants such as Brazil and Mexico. The country ranked third for its Market Rewards score, but its overall rating was boosted by a relatively high Country Rewards score of 90.

Key Trends & Developments.
.. New outsourcing and IT services contracts in both public and private segments have pointed to the underlying demand potential, and growing interest in cloud computing services is another driver. Canadian institutions in key IT spending segments such as financial services, distribution and transport will continue to embark on complex IT projects
.. Fiscal constraints faced by the Ontario government in particular represent a challenging environment for vendors. Meanwhile Toronto authorities have also launched a Core Spending Review targeted, which could have negative implications for IT spending. However a focus, by Ontario and other authorities, on deficit reduction through public services delivery reforms should also potentially represent an opportunity for IT vendors.
.. Growing interest in cloud computing is expected, with Canada currently lagging the US and some other advanced industries. The industry in Canada remains fairly small. A 2011 survey commissioned by Microsoft Canada found that nearly 73% of Canadian SMEs understood that cloud-based services was a cost-effective delivery model, but that just 30% were investing in such services.

Table Of Contents

Executive Summary .. 5
Industry SWOT Analysis . 7
Canada IT Segment SWOT .... 7
Canada Political Environment and Risk Analysis ..... 8
Canada Economic Environment and Risk Analysis .. 8
IT Risk/Reward Ratings ..... 9
Data : Regional IT Risk/Reward Ratings Q212 ... 12
IT Industries Overview 13
IT Penetration 13
Sectors And Verticals ....... 17
Canada Industry Overview . 21
Hardware ....... 22
Software 25
Services . 28

Industry Developments .... 30

Market Projection .... 31
Data : Canada IT Segment - Historical Data and Projections, from 2008 to 2016 ..... 34

Market Projection Internet ........ 35
Telecoms Segment - Internet - Historical Data and Projections, from 2009 to 2016 .. 35
Macroeconomic Projection 37
Data : Canada - Economic Activity ... 39

Competition Overview ... 40
Hardware ....... 40
Software 42
Services . 44
Country Snapshot: Canada Demographic Data 46

Section I : Population ....... 46
Data : Demographic Indicators, 2005-2030 ........ 46
Data : Rural/Urban Breakdown, 2005-2030 ....... 47

Section II : Education And Healthcare 47
Data : Education, 2000-2003 ... 47
Data : Vital Statistics, 2005-2030 ...... 47

Section III : Labour Industry And Spending Power .. 48
Data : Employment Indicators, from 2001 to 2006 . 48
Data : Consumer Expenditure, from 2000 to 2012 (US$) 49
Data : Average Annual Manufacturing Wages, from 2000 to 2012 ... 49
BMI Methodology .... 50
How We Generate Our Market Projections . 50
Transport Market .. 50
Sources ...... 51

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