Just Released: "Canada Information Technology Report Q1 2014"

BMI's outlook for IT market growth in 2014 is unchanged in the Q1 2014 update, with the decline in desktop and notebook shipments already factored into our forecast. We expect Canada's IT market to report moderate overall growth in 2014, constrained by slower economic growth and relatively weak confidence. This quarter we take a look at the roles international and local companies play in the Canadian IT market.

Headline Expenditure Projections

Computer hardware sales: CAD15.3bn in 2012 to CAD15.4bn in 2013, an increase of 0.6%. Demand for tablets is strong, maintaining unit growth. However, with the shift to relatively cheaper tablets through cannibalisation of notebook sales, increases in market value will be muted.

Software sales: CAD9.0bn in 2012 to CAD9.3bn in 2013, an increase of 2.4%. There is enterprise software growth potential. However, public-sector deficits will require vendors to provide a clear cost benefit if they are to secure sales growth.

IT Services sales: CAD20.9bn in 2012 to CAD21.4bn in 2013, an increase of 2.5%. Cloud computing market expected to continue gaining momentum as competition from local vendors increases. Emerging technologies such as real time enterprise services and data analytics are another growing segment of the market.

Full Report Details at
- http://www.fastmr.com/prod/768347_canada_information_technology_report_q1_2014.aspx?afid=301

Risk/Reward Ratings: Canada's score is 70.3 out of 100.0. Canada ranks second in our latest RRR table, behind the US, but still ahead of Latin American giants such as Brazil and Mexico.

Key Trends And Developments

Vancouver authorities unveiled a CAD30mn plan to turn the city into a high-tech integrated digital community by 2017, including expansion of the city's open data programme, access to city services through digital platforms and an incubator for local digital businesses. More recently IBM has partnered with Waterfront Toronto to build a smarter city. These developments place Canada well as a technology hub.

Enterprise spending on IT should be driven by hardware refreshes, datacentre consolidation and a growing interest in cloud computing. However, in the cloud computing market the issue of data security could limit adoption in the short term, with the market heavily reliant on US providers. Surveys in 2013 show Canadian enterprises already had concerns about cloud adoption with US companies, due to the Patriot Act, even before the revelations about the NSA activities and the European Parliament commissioned reports on the US Foreign Intelligence Surveillance Act. This was estimated to dent growth in 2013; however, there are an increasing number of local solutions appearing that will boost growth over the medium term.

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