octobre 2003

	The Top 10th IT Solution Providers in Canada - Hypertec is the #10 among the top 15 IT solution providers - by Evans Research Survey

The Top 75 Solution Providers in Canada

• Reduced capital spending on IT Infrastructure by corporations and government.
• Increasing market share in the server market for the manufacturers that use the direct model.
• Encroachment in the solution provider market by outsourcers and consulting firms.
• Weak economic conditions

Fortunately the outlook for 2004 is significantly better. ERC believes that the following factors will lead to strong increase in revenues for the Top 75 next year.

• The installed base of equipment has become very old. This should be enough to prevent another year of reduced capital spending and will likely ensure a healthy increase in IT investment.
• The share for the direct model is approaching its natural limit.
• The other market players who have encroached on the share of the Solution Provider channel are not well positioned to support and service their customers in the small and medium business segments. These other market players will need to subcontract a growing range of services to the Solution Provider channel in order to ensure a positive experience for their clients.
• The overall Canadian economy should achieve greater growth in 2004 than it did in 2003.

Moreover ERC believes that over the longer term following factors will contribute to the growth and success of the Solution provider channel:

• While server manufacturers now compete heavily with the Solution Providers for equipment sales, the network, printer and storage manufacturers remain highly loyal.
• End-users are continuing to convert to Windows and Linux, two environments that Solution Providers are highly skilled in. The software environments that belong to the server manufacturers are continuing to decline.
• Margins on servers and desktops have been virtually non-existent for the last five years. Revenues that have been lost in 2003 to the direct manufacturers will have little or no impact on the profitability of the Solution Provider channel going forward.
• Solution Providers continue to develop their skills in the application software and utilities that are used by their customers. Thus they will be able to increase their service revenues.

Although 2003 has unquestionably been tough, the outlook for the medium and long term is much better. The firms thathave proven their resilience by surviving this difficult year are now positioned for another prolonged period of growth.