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Study By Leading Technology Providers In Canada Reveals Canadian IT Channel Generates $25 Billion In Revenues
Significant economic, employment and expenditure benefits identified
MISSISSAUGA, Ont., Jan. 11, 2001
Surpassing forecasted expectations for 2000, the Canadian IT Channel realized $25 billion in revenue last year, reinforcing its importance to the entire Canadian economy. Through a Microsoft Canada Co. and Hewlett-Packard (Canada) Ltd. sponsored study conducted by International Data Corporation (IDC) Canada Ltd., measuring the impact of the IT channel on the broader economy and the Canadian IT industry in general, three key areas were examined: economic impact, employment and expenditure.
Key findings of the study include that the IT channel in Canada generates $25.1 billion in revenue. Over 155,000 people are employed through the channel, including over 11,000 new jobs in 2000. In the year prior, job growth in the IT channel represented 3.7 per cent of the total net job creation in Canada. Through business and employee expenditures, the IT channel puts $16.6 billion back into the Canadian economy. In comparison to other industries, the IT channel represents 1.6% of Canada's Gross Domestic Product (GDP), which is slightly greater than the GDP of the agricultural sector in Canada (in 1999).
"The impact of the IT channel in Canada continues to be strong with significant effect on the Gross Domestic Product, national job creation and spending into the economy," said Tony Olvet, director of partner and channel programs at IDC Canada. "The relationships that Canadian IT vendors have developed with the vast number of value-added partners that are able to efficiently assist organizations in the deployment and management of critical business solutions, is a testament to the effectiveness of the IT channel in Canada."
The IT channel is defined as those organizations that provide technology consulting, integration and fulfillment services for hardware and software products in order to help their clients solve business challenges. The channel represents a network of IT specialists who not only sell the product to businesses, public sector organizations and consumers but also provide training and develop customized business solutions.
In 1998 Microsoft and Hewlett-Packard (Canada) Ltd. commissioned the initial study by IDC that confirmed the strong impact of the channel on the IT industry and Canadian economy. In the two years since that first study, the channel continues to demonstrate its strong role in the Canadian market, particularly against the contribution of other technology companies that choose to adopt a direct sales only model in Canada.
"The results of the IDC study serve as an excellent proof-point for Microsoft Canada Co.'s central business practice. Our channel distributors and service providers are an essential part of our business in Canada, one through which we drive over 90 per cent of our business and will continue to do so," said Claudio Silvestri, director of customer and partner management at Microsoft Canada Co. "As the channel continues to evolve, we will evolve our programs to meet the needs of our distributors, value added resellers, systems integrators, independent software vendors and application service providers."
The 2000 study also found that IT channel and service employees have an annual average salary of over $42,000, 31 per cent more than the average Canadian worker. This is attributed to the higher skill-set demand in IT. When examining the educations of IT channel and service workers, the study revealed that 35 per cent of them had College educations, 31 per cent had University undergraduate degrees, 23 per cent had Secondary School educations and 11 per cent had University graduate educations.
"HP is focused on enhancing the customer experience. We value the expertise of our channel partners to provide and facilitate the high-quality support and services our customers have come to expect," said Lynn Anderson, vice president marketing, Business, Hewlett-Packard (Canada) Ltd. "HP Canada is committed to working closely with its channel partners to create better business opportunities and customer service for all."
The IT channel's operating expenses of $16.6 billion also contribute strongly to the Canadian economy through the "ripple effect." For example, the IT channel spends an estimated $703 million on corporate taxes, $675 million on rent, over $800 million on advertising, promotions, travel and entertainment and over $6.6 billion on salaries, wages and benefits.
About IDC and the Study Methodology
IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and ebusiness trends to develop sound business strategies. IDC Canada forecasts and provides keen insight on Canadian, in addition to worldwide, IT markets and technology trends. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies and the financial community. Additional information can be found at www.idc.ca and www.idc.com.
IDC is a division of IDG, the world's leading IT media, research and exposition company.
The Canadian Channels Impact Study 2000 findings are based on survey and analysis work prepared by IDC Canada. A key input to the study is IDC Canada's data cube of IT channels, markets and products, a database built from analysis of thousands of annual Canadian-based end-user, manufacturer and channel survey responses. In addition, a custom survey of 101 Canadian IT channel and service providers was fielded to capture trends and information on business models, employment, and business behaviour. Further information was gathered from the IDC/Channel Business salary survey and through secondary sources, such as Statistics Canada.
About HP Canada
HP (Canada) Ltd. has more than 1,500 employees at 19 locations across Canada. Its revenue in fiscal 2000 was $1.8 billion (Canadian).
Hewlett-Packard Company -- a leading global provider of computing and imaging solutions and services -- is focused on making technology and its benefits accessible to individuals and businesses through simple appliances, useful e-services and an Internet infrastructure that's always on.
HP has 88,500 employees worldwide and had total revenue from continuing operations of $48.8 billion in its 2000 fiscal year. Information about HP and its products can be found on the World Wide Web at http://www.hp.com.
About Microsoft Canada Co.
Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software -- any time, any place and on any device.
For more information please visit http://www.microsoft.ca.