Canadian software industry healthy: PwC   |  September 5, 2006  

 Canadian software companies had markedly better financials in 2005 than in previous years, according to a survey conducted by PricewaterhouseCoopers (PwC).

Of the companies surveyed by PwC for the third annual Report

on Emerging Canadian Software Companies: The CEO Perspective, 65 per

cent were profitable in 2005, up from 56 per cent in 2004 and 33

per cent in 2003.

“The increase in revenues is likely because companies are

implementing more scalable business models, creating lower cost

structures and hiring seasoned management with experience in

building profitable businesses,” said Susan Allen, leader of the PwC

Emerging Company Practice.

“Emerging-company CEOs surveyed this year are again predict

ing a revenue increase of some magnitude in 2006 and 40 per cent

predict revenue increases in excess of 50 per cent.”

CEOs are concerned about growing revenues and developing strategic partnerships, and on the downside 20 per cent reported their companies did not meet last year’s forecasts.

In terms of technology usage, approximately 50 per cent of those surveyed employ open source software (OSS) in some capacity. Seventy per cent of the emerging-company CEOs expect OSS to deliver more functionality versus only half of the large-company CEO respondents.

Overall, more than 70 per cent of emerging-company CEOs reported being slightly positive or positive about the growth in Canadian software IT spending.