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BlackBerry has acquired a minority stake in privately held health care IT firm NantHealth (Geoff Robins/THE CANADIAN PRESS)
BlackBerry has acquired a minority stake in privately held health care IT firm NantHealth (Geoff Robins/THE CANADIAN PRESS)

BlackBerry barely holds on to Canada’s top tech spot Add to ...

Diminished technology superstar BlackBerry Ltd. was still – barely – Canada’s biggest technology company in 2013, but that is almost certain to change.

The annual Branham300 listing of the top Canadian information and communication technology firms shows BlackBerry hanging on to top spot in 2013, where it has been for five years, despite a 40-per-cent drop in revenue. Montreal-based IT services company CGI Group Inc. has jumped into second place with a 111-per-cent increase in revenue.

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The big mobile-phone firms, BCE Inc., Telus Corp. and Rogers Communications Inc., round out the top five (although only their data and cellular businesses are included).

The rankings, to be released Tuesday, are based on revenue reported in fiscal years ended in 2013.

Struggling BlackBerry will probably drop out of the top spot in next year’s listing, because it has already reported its 2014 results (its year ended March 1), where revenue fell to $6.8-billion from $11.8-billion in 2013. CGI, which is growing fast, surpassed the $10-billion revenue mark in 2013.

Despite BlackBerry’s troubles, the Canadian high-tech sector is highly resilient and thriving over all, says Wayne Gudbranson, president of Branham Group Inc., the consulting firm that compiles the list.

He noted that revenue for the top 250 tech firms in Canada rose 2.4 per cent overall in 2013 after a flat 2012, even with BlackBerry’s slump. And if BlackBerry’s numbers are removed from the list, revenue growth at the remaining companies was 13.3 per cent in 2013.

“That is unbelievable growth,” he said. “Fundamentally, technology is back in a big way.”

As well as many high-growth small companies, he said, Canada has a strong base of medium and large technology firms with stable and consistent growth.

Canada has often put a lot of weight on one large technology firm, Mr. Gudbranson noted. Indeed, prior to BlackBerry’s rise to the top of the Branham list, Nortel Networks held that spot for several years in the mid 2000s, before it imploded.

CGI Group now appears headed to the top of the class, thanks to both internal growth and acquisitions. In 2012 it bought British computer service firm Logica PLC, dramatically boosting its international operations.

CGI Group’s global aspirations should be a lesson to smaller technology companies, Mr. Gudbranson said. Almost all firms in the sector that have compound annual growth rates of over 30 per cent also have a substantial amount of their revenue – more than three quarters in many cases – from sales outside of Canada, he said. “There has got to be more of a focus on export markets.”

Over all, professional services firms – including CGI Group – represent the fastest growing subsector in the Branham list. Those companies saw total revenues increase by almost 50 per cent in 2013 to $18.4-billion. The software group, which includes companies such as OpenText Corp. and Constellation Software Inc., showed the second highest revenue growth, at 20 per cent, to $6-billion. The only subgroup to show a decline was hardware and infrastructure, with a 20-per-cent drop, and that was mainly attributable to BlackBerry’s shrinkage.

According to the Branham numbers, the vast majority of information and communications technology activity takes place in just four provinces, with almost half of revenue generated in Ontario alone. Quebec, British Columbia and Alberta generate most of the balance, with Quebec’s share growing thanks to the surge in CGI Group’s revenue.

The Branham report predicts that the number of start-up companies in the sector will accelerate thanks to internet technology, which allows small firms to get started on a very limited budget. At the same time, the shrinkage at BlackBerry means there are many skilled workers available, particularly in the Waterloo, Ont., region where the company is based. That, along with the incubators in the region, make the area “a bustling startup ecosystem,” the report said.

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Canada’s largest information and communication technology companies

RankCompanyBusiness2013
revenue
($-bil)
Yr-over-yr
revenue chg
1BlackBerryMobile commun.11.8-40%
2CGI GroupInfo. Tech. svcs.10.1111%
3BCE*Wireless and data svcs.9.51%
4TELUS*Wireless and internet svcs.9.36%
5Rogers Commun.*Wireless and Internet svcs.8.41%
6CelesticaElectronic manufac. svcs.6.3-8%
7Shaw Commun.*Internet svcs.3.110%
8CAEModelling, simulation & training2.116%
9MacDonald, DettwilerAdvanced info. solutions1.8104%
10OpenTextInfo. mgmt. software1.413%
11Constellation SoftwareEnterprise software1.230%
12SoftchoiceTech. solutions & svcs.1.1-1%
14Videotron*Wireless & internet svcs.1.09%
15TelesatGlobal fixed satellite svcs.0.98%
16MTS Allstream*Wireless, internet & security scvs.0.9-6%

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