IT consulting was the catalyst for healthy revenue growth in the software development and computer services industry in 1999, according to figures released Monday by Statscan.
It also found that the computer systems design and related services industry grew by 33 per cent and accounted for $16 billion in total revenues that same year.
It was the first time the annual survey was broken down by revenue according to a specific category. Within the 33 per cent growth rate, the bulk of revenues came from the software industry, followed by custom application design and development and IT infrastructure and network management services.
“The health (of the industry) was good at that time. We had a lot of venture capital investment and Y2K,” said Paul Nixon, unit head of the information unit at Statistics Canada in Ottawa.
Alister Sutherland, director of software programs at IDC Canada in Toronto said the vast increases in software revenue can be attributed to sales into the U.S. and other foreign markets, not direct sales in Canada.
But, he added, there is no doubt the current soft economy will result in more modest figures for 2001. “Prior to the recession, we expected growth in the software market to be around 11 per cent to 12 per cent in Canada. We’ve revised it down to eight per cent in 2001 and about the same for 2002.” For 2000, software revenues were over $6 billion. Despite the drop in growth forecasts, he expects the software market will still outperform most other areas in the IT industry.
“In Canada, we have one of the highest PC usage rates in the world. That has had a great effect,” said Dan Lamb, software asset management consultant with Corporate Software in Calgary.
He cited the software upgrade changes made on the operating systems such as Microsoft Corp.’s Windows ME and XP, coupled with the company’s drastic changes to licensing agreements, as factors that have led to higher overall sales.
Statistics Canada in Ottawa can be reached at http://www.statcan.ca
IDC in Toronto can be reached at http://www.idc.ca
Corporate Software in Calgary can be reached at http://www.corpsoft.com