Deloitte announces 2008 Technology Fast 50 ranking

Ontario dominates the 2008 Deloitte Technology Fast 50 ranking, placing 27 firms including seven in the top 10. Markham ON-based Nightingale Informatix Corp (healthcare service and software) took the top spot with a five-year growth rate of 23,078% — an impressive feat but far off the 42,120% growth rate registered by Sandvine, last year's overall winner. The remainder of the list is populated by firms from Quebec (11), British Columbia (7), Alberta (4) and Newfoundland (1).

Thirty of the top 30 firms are classified as software with the remainder split between telecom and hardware.

When compiling the list, Deloitte also interviewed the firm's CEOs, and their opinions of the Canadian high-tech sector are far from optimistic. The CEOs cite several factors for their collectively negative outlook. These include the growing weakness in the US and global economies, the virtual collapse of venture capital support for emerging firms and problems in the taxation and regulatory environment.

The deteriorating economic environment (the interviews were conducted prior to the current banking crisis) led 71% of CEOs to change or review their current strategies, while 57% see the industry slowing down. Of the 50 firms on the list, 32% are venture capital (VC) backed, while an identical percentage are backed by debt. Lack of VC has prompted many firms to seek out debt backing or finance growth from cash flow.

The tax and regulatory burden was cited by 54% of CEOs as a barrier to growth and competitiveness. On the issue of federal and provincial harmonization, more than half agreed it was a good idea and would allow them to grow, raise capital and expand into international markets.

On the upside, the CEOs saw continued opportunity in the wireless sector and new opportunities in the green tech and clean tech sectors. Ironically, high-tech firms are less likely to implement energy conservation techniques and use environmentally friendly energy sources. Waste reduction measures were being implemented by 52% of the firms. FMI: www.deloitte.com

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