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| Top 25 Professional IT Services |
November 30, 2006 |
The Top 25 Canadian IT Professional Services companies continued to perform strongly over 2005. This category is composed of companies which provide services to IT and IT/ICT-related organizations.
Many of the noted companies are from the IT staffing field, an area that continues to grow with the demand for skilled technical workers such as programmers, project managers, engineers, etc. Other companies are IT consultancies that provide both technical and business aid to organizations, which can
range from complex design and integrations solutions to low-level software development outsourcing.
Accounting for about 25 per cent of the Top 250 list, the Professional Services category has decreased slightly from last year’s total makeup of 29 per cent. Industry Canada finds the GDP of the ICT Services industry in Canada (including software services) has grown by 15 per cent from the end of 2001 to
the third quarter of 2005, compared to 12 per cent growth in all Canadian services industries.
The companies on the Top 25 list and the remainder of the Professional Services companies have shown a uniquely connected growth rate.
Since the Top 25 Professional Services companies contributed to the majority of the total revenue for the category (with CGI Group alone composing 48.5 per cent of the total Professional Services revenue), we have analyzed the year-over-year revenue growth rate of the Top 25 Professional Services companies compared to the growth rate of all other Professional Services companies (see graph). This way, we see how the Top 25’s rate of 17.24 per cent is very close to the growth rate of all the other Professional
Services companies (17.02 per cent). It is evident that the smaller companies did just as well as the larger companies, in terms of annual revenue growth.
While Ontario maintains a 52 per cent majority in the composition of the Top 25 list, Alberta is second with 16 per cent, while British Columbia and Quebec have equal contributions of 12 per cent each. Nova Scotia has two of its companies on the list, making up eight per cent of the total. The province has lately been recognized as a growing target fornearshore outsourcing and will most definitely play a larger role in the forthcoming years.
This sub-list has changed in some ways, but the leaders have remained similar. The Top 5 companies are the same as last year and in the same respective positions, with the exception of Compugen, which took
the number five spot previously occupied by Ajilon Consulting. (Ajilon is now listed as a Top 25 Multinational organization because of its foreign parent company.) In fact, Compugen showed the highest year-overyear growth of all the Top 25 Professional Services companies with a 45 per cent growth rate. Polar Bear Corporate Education Solutions is second in growth with 39 per cent and AJJA Information Technology Consultants followed closely at 38 per cent. This is also the final year that AJJA will be appearing on the Branham300 since it has been acquired by Brainhunter. Brainhunter had a very busy
year as well, dealing with multiple acquisitions and the growing demand for IT staffing services. With the acquisitions made this year, Brainhunter stated that pro forma revenues would have been close to $160 million, but these revenues will be realized in the Branham300 next year.
While the annual growth percentages for the Top 25 companies compared to all other companies are quite similar, we see that the top five growth companies amongst all Professional Services companies are at the
bottom tier, with 2005 revenues between $4 million and $7 million, demonstrating how small service businesses have had a successful year. The top three companies continue to show stability as being the solid leaders for yet another year with CGI Group growing by 17 per cent, MacDonald, Detwiler and Associates growing by 12 per cent and xwave (a subsidiary of Aliant) growing by four per cent.
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