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Tech industry sails to $1.67 billion
Victoria's quiet industry has surpassed tourism and a study's rosy figures are expected to help the sector
Andrew A. Duffy, Times Colonist
Published: Saturday, May 12, 2007It's a quiet industry, often toiling in out-of-the-way buildings, online or selling its wares in far-off lands, but the Greater Victoria high-tech community is starting to make some real noise at home.
According to a study commissioned by the B.C. Regional Science and Technology Network, Victoria's high-tech industry annual revenues have grown to more than $1.67 billion. That slingshots it past Victoria's tourism industry, which says it has annual revenues of $1.19 billion, based on their own data and information from the B.C. government.
"Even two years ago I couldn't have imagined the industry would have come this far," said Dan Gunn, executive director of the Vancouver Island Advanced Technology Centre. "This is still at least $200 million beyond what I thought it would be."
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Harry Weiler, CEO of Sidney-based Axys Technologies, displays a Triaxys Directional Wave Buoy and two Watchkeeper Environmental Monitoring Buoys in the background. Investment in cutting-edge technology and new businesses processes has kept the company competitive.
John McKay, Times Colonist
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With the robust revenue numbers, there is a sense this is the high-tech industry's coming out party, and the industry should make the most of it, said Gunn.
"When people heard we were a $1 billion industry, they said, 'wow, I had no idea.' Well, this reinforces that and because it's a third party doing the study it will be seen as more valid," Gunn said, adding these are the kinds of numbers that will get people to sit up and take notice.
"We need to get recognition for our tech sector on a national and global stage because, like everybody else, there are some challenges we face to grow. If people don't realize they have opportunities here in Greater Victoria it's that much more difficult to deal with those challenges."
The survey -- the B.C. Regional Science and Technology Network also surveyed six other regions -- was completed by 340 of Victoria's 878 high-tech firms, with 333 of them providing their annual revenues totaling $1.1 billion.
Secondary sources provided information to give 26 other companies' numbers -- $62 million in annual revenues -- and the survey consultants extrapolated that the remaining 519 companies would add $519 million to the total, giving them what they considered a conservative estimate of $1.67 billion.
Gunn said they hope to use that figure to garner interest in the sector and create more awareness across the province and the country.
If nothing else it will provide another reason to celebrate when VIATeC holds its annual awards May 23 at the Victoria Conference Centre.
"It really has very little to do with selecting winners ... it's more about recognizing companies that deserve some recognition for a lot of hard work," said Gunn. "The point is always to get together and celebrate our successes and cheer each other on but this year is particularly special because of what has been accomplished."
THE MOVERS AND SHAKERS: NOMINEES FOR TECHNOLOGY COMPANY OF THE YEAR:
Axys Technologies
In business there are constantly ups and downs, especially when you've been operating for decades. And while many of their fellow high-tech companies are working on their first 10 years, Axys Technologies -- a division of the Axys Group which has been around since 1974 -- is working on the ins and outs of doing business after more than two decades.
"There is certainly some longevity there," said Axys Technologies president Harry Weiler, noting the actual age of the division tends to get lost in the early 1980s as the company emerged from the group out of necessity.
But what doesn't get lost is its staying power and success. According to Weiler, who has been at the helm for six years, in that time Axys, which designs, manufactures, installs and maintains remote environmental data buoys and telemetry systems, has nearly tripled in size both in terms of people (30) and revenue.
"And in doing so we have continually invested heavily in the business, brought in new technology and business processes. We've created infrastructure to allow us to grow," he said.
That's one of the big reasons he believes they have been named as a finalist for technology company of the year. "I think we are being recognized for sustainably growing our company, certainly over the last six years," he said. "We've had our ins and outs, but we have not laid anyone off in that time, there's not many companies that can say that."
Axys Group, founded by a group of researchers including Peter Berrang and Dave Thomas, includes Axys Analytical and Seastar Chemicals.
Contech Electronics
Know your strengths and play to them.
According to Erik Djukastein, president of Contech Electronics, that's the secret behind a strong year for his company, which designs and markets electronic devices for pet training and wildlife control.
Djukastein said Contech continues to grow, as have expectations because of this back-to-basics philosophy. "We have excelled at the basics and become very good at execution and delivering great quality products with outstanding customer service," he said.
The company, which has 26 employees and tends to see revenue in the $4 million range with 80 per cent of its sales in the U.S., has added a new wrinkle to its marketing with a new focus on getting in touch with the grassroots. "We have made a significant additional investment in putting feet on the ground on the sale frontiers, trade shows, distributor shows and regional events," he said, noting they have shied away from media advertising instead opting to go directly to the people who re-sell or use their products. "We've made a concerted effort to be much more visible than ever before."
The company did recently make a major change in its executive as Mark Grambart, brought in as CEO only two years ago, left the company this spring. Djukastein claims it does not signal a change in direction in the company, merely the realization that the partnership wasn't ideal. "This was everything to do with how two people get along in a partnership and these things happen in partnerships," he said. "We realized it wasn't quite nirvana for both of us."
Neverblue Media
It's been a busy couple of years for Neverblue Media. The young company has grown by leaps and bounds, spun off a second company (Phoneinterviewed.com) and rounded things out in 2006 by accepting a purchase offer from Norwalk, Conn.-based Vertrue.
"Over the last year we've really been growing to this stage and it's been craziness for us," said president Todd Dunlop, who noted the company is beaming, having been nominated for VIATeC awards for both technology company of the year and human resources excellence.
Neverblue, an online lead generation and affiliate marketing company that drives traffic to its clients' websites and products, was founded three years ago but has grown rapidly to employ 84 at its two firms.
Dunlop said the company's founders have taken some time to look around recently and they admit even they are taken aback a little by what's happened in that time. And Dunlop expects more of the same going forward, noting the buyout will allow the company to focus on its core strengths, while its employees will have the benefit of working for a larger company that can let them grow and develop.
Vertrue's subsidiaries include Adaptive Marketing, MemberWorks Canada, Bargain Network, Coverdell & Co., and Lavalife and claims to have generated $200 million in operating cash flow which has been financing its acquisitions.
Pareto Logic
A focus on fundamentals and customer service appears to be behind the growing strength of Pareto Logic and its bid to make a mark for itself in the Internet security industry already full of some daunting competition.
According to CEO Elton Pereira the company, which develops security software applications, rode its early success in anti-spyware software to establishing itself as a $15 million company.
"When we started the company our focus was spyware, and at the time it was emerging quickly and right now it's a bigger problem than viruses," he said. "But we know we can't be a one-product company so we have come up with other applications ... we know we have to offer some compelling products because we are going up against (security icons) Symantics and McAfees."
To that end Pareto Logic has diversified its product line with a computer registry cleaner, anti-spam application and privacy protection software with others on the way. It's helped the company grow.
Pereira points out when he, Adrian Pereira the chief technical officer, and Don Wharton, chief operating officer, started the company in family homes in 2004 they realized about $3.5 million in sales in the first year. Now he's quick to point out they have 85 employees, Pareto software is in 75 countries and been downloaded by more than 50 million customers. He estimates they have tripled revenues in the last six months and could realize revenues in excess of $15 million this year.
