Branham 300 at The YTA _ April 2009

2009 Branham300YTA/GTMA Luncheon

April 3, 2009 Event Sponsor:

2009

Agenda

About Branham Group

2009 Branham300 – GTA

The Economic Downturn

Branham Group – About Us

BRANHAM GROUP

Global Marketing Consultancy and Industry Analyst firm

focused on the Information Technology Sector

Established in1990Based in Ottawa, Canada

Services Delivered Over 50 Countries

2009 Branham300 Edition Results

2009 Branham300 Edition Results

Branham300 – 2009 Edition

16 years, and counting…Premier Annual Listing - Top ICT Firms in CanadaRanked by Gross RevenuePrint Version Published by Backbone MagazineElectronic Version at www.branham300.com

…

Why Compile the Branham300?

Raise the profile of the Canadian ICT Industry both nationally and globally Demonstrate its depth and breadth

Provide up and coming companies with much needed recognition Increase market exposure and brand awareness Open the door for business opportunities, both domestically

and abroad

Someone needed to stand-up, pound their chest, and shout:

“CANADA’S ICT INDUSTRY IS INNOVATIVE, LEADING EDGE, AND HERE TO STAY!”

Branham300

The Branham300 is composed of: Top 250 Canadian ICT Companies

Top 25 Multinationals

Top 25 Up and Comers

The Next 50 (New in 2008!)

Top 250 – Over the Years20

03

2004

2005

2007

2006

2008

$49.81$55.83

$65.4$59.07

$64.4

$75.94

+12.09%+5.8%

+10.72% -1.53%

+17.92%

5 year growth = 52.46%1 year growth = 17.92%

GTA Companies – Three Year Revenue Comparison

2006

2007

2008

$29.1 B $29.4 B

$34.0 B

GTA Companies increased revenues by 15.63% in 2008 Represent 44.72% of the Top 250’s total revenues

GTA IS A SIGNIFICANT DRIVER OF GROWTH FOR THE CANADIAN ICT INDUSTRY

+15.63%

+0.95%

Branham300 Companies by Province

British Columbia

34 Companies13.6%

Alberta24 Companies

9.6% Sask.1 Company

0.4%

Manitoba3 Companies

1.2% Ontario146 Companies

58.4%

Quebec33 Companies

13.2%

Newfoundland and Labrador

2 Companies0.8%

New Brunswick4 Companies

1.6%

Nova Scotia2 Companies

0.8%

PEI1 Company

0.4%

Ontario is

Canada’s

Tech

Mecca

GTA Tech Companies – Importance to the Industry

0.08% – GTA’s Land Area Relative to all of Canada

38.0% – Percentage of the Top 250 Canadian ICT Companies HQ in the GTA

Growth is everywhere…in the GTA

36.8% of GTA companies appearing on the Top 250 increased revenues by more than 20% in 2008 74.7% of GTA companies recognized realized positive revenue

growth in 2008!

GTA Tech Companies – Importance to the Industry

GTA technology companies represent a significant portion of each of the Top 250 Quartiles GTA is home to all sizes of tech. businesses

Concentration of companies by quartile:

% in Top 10

% in Top 50

% in Top 100

% in Top 250

30% 32% 34%38%

Top 10 Tech Companies - GTA

GTA Rank

Rank 2008

Rank 2007 Company

2008 Revenues % +/-

1 1 1 Nortel Networks, Toronto, Ont. $12,719,002 -5%

2 2 2 Celestica, Toronto $9,481,883 -4%

3 6 5 Rogers Wireless Communications, Toronto $5,900,000 7%

4 15 15 Aastra Technologies, Concord, Ont. $760,389 25%

5 17 16 Rogers Communications (ISP), Toronto, Ont. $677,700 11%

6 19 27 Constellation Software, Toronto $387,429 30%

7 21 20 PROCOM (Procom Consultants Group), Toronto $321,000 -6%

8 24 21 Compugen, Richmond Hill, Ont. $300,000 26%

9 25 24 SMTC Manufacturing, Markham, Ont. $296,352 -6%

10 26 23 Teranet, Toronto $267,893 6%

GTA represents 30% of 2008’s Top 10 Canadian Tech companies

These 10 companies represent 92.58% of all GTA Top 250 revenues

Major Canadian Metropolis’ Comparison

City 2008 ($000) 2007 ($000) % +/- % of Top 250

Revenues # Companies Greater Toronto Area $33,977,329 $29,402,195 15.56% 44.72% 95

Montreal Area $15,005,046 $13,847,050 8.36% 19.75% 29Vancouver Area $9,256,921 $8,327,306 11.16% 12.18% 28

Waterloo $8,754,565 $3,986,012 119.63% 11.52% 9Ottawa Area $2,886,438 $3,578,074 -19.33% 3.80% 25

Calgary $2,488,242 $2,015,736 23.44% 3.28% 21Winnipeg $1,041,408 $964,919 7.93% 1.37% 3

Halifax $367,144 $291,374 26.00% 0.48% 2

‘07 ‘07 ‘07 ‘07 ‘07 ‘07‘07 ‘07‘08 ‘08 ‘08 ‘08 ‘08 ‘08

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Leading Tech. Companies in the GTA

Leading Technology Companies in the GTA

Leading Software Companies in the GTA

Constellation Software #2 ranked software company in Canada (up from #4 in 2007) Increased revenues by over 30% in 2008 Completed over 15 acquisitions

Algorithmics Jumped two spots in 2008 to the #4 ranked software company in

Canada Slightly increased revenues in 2008 (1% growth)

Rank 2008

Rank 2007

250 Ranking Company 2008 Revenues 2007 Revenues % Change

2 4 19 Constellation Software $387,429 $297,606 30%4 6 34 Algorithmics $176,597 $174,094 1%7 9 51 Platform Computing $78,537 $75,243 4%

14 11 73 Enghouse Systems $53,009 $55,201 -4%15 75 Redknee $50,701 $38,616 31%21 25 86 Clarity Systems $41,000 $32,000 28%24 19 92 Belzberg Technologies $39,369 $40,653 -3%

Leading IT Professional Services Companies in the GTA

Rank 2008 Rank 2007 250 Ranking Company2008

Revenues2007

Revenues % Change3 4 21 PROCOM (Procom Consultants Group) $321,000 $342,000 -65 5 24 Compugen $300,000 $239,000 266 7 26 Teranet $267,893 $253,681 67 8 28 Brainhunter $237,000 $224,565 6

11 12 43 TES - The Employment Solution $106,915 $89,495 1912 44 OnX Enterprise Solutions $106,720 $55,463 9216 53 FlexITy Solutions $78,000 $40,000 9517 16 58 Azcar Technologies $71,622 $70,026 218 19 60 Adastra $70,140 $55,000 2821 20 70 Systematix $55,000 $52,000 623 90 Cyberplex $40,000 $17,652 127

High concentration of IT Professional Services companies headquartered in the GTA 44% of the TOP 25 IT Professional Services companies in Canada

located in the GTA 91% of GTA IT Professional Services Companies experienced positive

revenue growth in 2008PROCOM Consultants Group Inched into the top three for the first time in 2008

Leading ICT Hardware and Infrastructure Companies in the GTA

Rank 2008

Rank 2007

250 Ranking Company

2008 Revenues

2007 Revenues % Change

1 1 1 Nortel Networks $12,719,002 $13,406,921 -5%2 2 2 Celestica $9,481,833 $9,883,012 -4%6 6 15 Aastra Technologies $760,389 $606,589 25%9 8 25 SMTC Manufacturing $296,352 $313,997 -6%

15 14 38 Gennum $129,326 $110,497 17%21 19 54 Coretec $77,600 $85,417 -9%25 66 Firan Technology Group $60,041 $55,632 8%

GTA ICT Hardware and Infrastructure companies contribute 65.57% of Top 25 ICT Hardware and Infrastructure companies revenues

Nortel Networks – ranked #1 in 2008 Largest company in the Canadian ICT industry by gross revenue Uncertainty circles telecom giant following January bankruptcy filing

announcementCelestica – ranked # 2 in 2008 Can they surge forward in 2009 to claim the top spot

Leading x Service Provider Companies in the GTA

Rank 2008

Rank 2007

250 Ranking Company

2008 Revenues

2007 Revenues

% Change

3 3 6 Rogers Wireless $5,900,000 $5,500,000 7%

7 7 17 Rogers Communications (ISP) $677,700 $612,000 11%

9 8 27 Cogeco Cable (ISP and data) $250,784 $217,538 15%

Highly consolidated sector – dominated by the “Big Three” BCE, Telus, Rogers “Big Three” represent 79% of Top 10 xSP companies revenues

Rogers Wireless Maintained its 3rd ranked position in 2008 Increased revenue by 7% in 2008

Top 20 Movers and Shakers

Rank CompanyNumber of

places movedRank 2008

Rank 2007

2 Cyberplex, Toronto 65 90 155

3 Scalar Decisions, Toronto 55 85 140

7 The Herjavec Group, Toronto 37 120 157

9 Illumiti, Markham, Ont. 31 131 162

14 Klick Communications, Toronto 27 123 150

17 Sangoma Technologies, Markham, Ont. 26 181 207

18 RuggedCom, Woodbridge, Ont. 25 79 104

7 of the Top 20 biggest movers on the 2008 Branham300 are GTA-based companies

Cyberplex headlines this year’s list after achieving 127% revenue growth (estimated) in 2008 2nd consecutive year they have appeared on the Movers and Shakers list Have jumped a combined 126 positions on the Branham300 in the last two

years.




CompanyYear Est. Website Business Specialties

ecobee 2007 www.ecobee.com Home thermostat automation for energy optimization.

Filemobile 2006 www.filemobile.com On-demand social media platform solutions.

Fonolo 2007 www.fonolo.com Interactive voice response avoidance solutions.

Morega Systems 2006 www.morega.com Advanced media mobility software systems.

N4 Systems 2006 www.n4systems.comIntegrated inspection, safety compliance and maintenance solutions.

PlanetEye 2006 www.planeteye.com Interactive online travel planning solutions.

Zerofootprint 2008 www.zerofootprint.net Enterprise carbon management solutions.

Recognizes the future of the ICT industry in CanadaListing is based on the following: Long-term potential for success Innovation Creativity

7 of this year’s 25 Up and Comers are headquartered in the GTA INNOVATION LIVES HERE

Branham300 Summary

The Canadian ICT Industry finished strong in 2008 and into early 2009 Top 250 set a new Branham300 revenue record!

$76 Billion in combined revenues Increased revenues by 18% in 2008

GTA Companies on the Branham300 enjoyed a successful 2008 Increased revenues by 15.63% in 2008 Largest geographic segment of the Canadian ICT

industry




2009 - In the Headlines…

How will Economic Downturn Impact the Canadian ICT Industry?

Marginal impact to date, minimal in the next 12 months

ICT is an enabler

Potential slippage in certain geographic and vertical markets US, UK Automotive, Energy, Mining sectors

Implications for vendors Longer sales cycles Some price discounting Increase sales and marketing spend Focus on innovation Continue to diversify

THE CANADIAN ICT INDUSTRY INCREASED REVENUE BY 18% IN

2008

Companies Can Succeed in Difficult Times!

The early-1980’s: Slow money supply growth and high interest rates cause economy to slow

Interest rates rise to a peak of 21% in August 1981 18 companies on the 2009 Branham300 founded!

E.g. Compugen, OnX Enterprise Solutions, Coretec

The early-1990’s Interest rates spike (high – 14.05%) US was also experiencing recession – severely hurt Canadian exports 25 companies on the 2009 Branham300 founded!

E.g. Teranet, Platform Computing, Dundas Data Visualization

Dot-Com Meltdown 39 companies on the 2009 Branham300 founded!

E.g. Brainhunter, TeraGo Networks, Ideaca Knowledge Services

IT has overcome adversity before, remember?

THE GROWTH Nearly half-a-decade of record setting growth, surging

stocks prices (leading to overvalued companies), and free spending

THE BURST NASDAQ (tech dominated exchange) fell 39% in 2000! Total market value of technology firms declined

approx. $5 trillion US between March 2000 and October 2002

THE RECOVERY Survival of the fittest Canadian ICT Industry achieves five consecutive years of growth

.Com/.Toast:

Closing Remarks…

“Some people dream of success... while others wake up

and work hard at it.” ~Author Unknown

Q & A

Contact

J. Wayne Gudbranson

President & CEOTel: (613) 745-2282 ext 113 E-mail: [email protected]

www.branhamgroup.com