Highlights from the software sector in the early days of the global pandemic

May 12, 2020
4.5 mins | 970 words
By: David Rodas-Wright

David Rodas-Wright HeadshotHold fast! – In sailing folklore, those words were often inked across the knuckles of deckhands, such as in the days of naval warfare between Georgian England and Napoleon’s France. The term refers to sailors bearing or holding down the line for security as the ship fights through stormy seasHold fast has indeed been the consistent message of most Ottawa software companies in these early days of self-isolation, under the global pandemic. Over the past month, I’ve talked to many firms. There are no signs of anyone letting go or easing their grip. 

Ottawa’s software sector is a highly diverse group of companies selling enterprise and consumer-oriented software to global and domestic markets. It is perhaps the fastest-growing portion of the tech economy in the city. There are, at last count, roughly 550 vibrant companies offering software solutions, employing about 22,000 professionals.  

The sector delivers consulting and support services to both government and enterprise clients. Many have developed and sell or license their own software innovations. This list includes more generally SaaS-Cloud enterprise solutions – Software, Platform, Infrastructure (X or anything as a Service). More specifically, software is used in Internet of Things (IoT) architecture and vertical solutions; cybersecurity and authentication innovation; digital health; artificial intelligence-machine learning; network management; data analytics; and fintech and blockchain products.  

Ottawa is also emerging as a powerhouse in connected and autonomous vehicle systems and is already a global leader in e-commerce. Our gaming and animation hub continues to work with global leaders in the creation of amazing products and content used and viewed across the globe.  

Our city benefits from a healthy mixture of small- to medium-size businesses, with 250 employees or less. It has also been home for decades to MNEs, with head offices in New York, Boston, California’s Bay Area, London, Detroit, and Tokyo, while having cultivated and launched its own global success stories  

Some may assume that software and SaaS producers, in particular, should be having a smoother ride than other companies that depend on a global supply chain for hardware products, as well as employees working on-site. Not for all. Most of these businesses need healthy clients, and adequate infrastructure, to be able to keep business moving smoothly. As the professional world has settled into the Work from Home routine, many of the companies interviewed speak of important gaps in infrastructure.  

For example, if you are a company, or a client, requiring faster or more reliable upload speeds, or a more secure remote/virtual environment, you are likely running into issues. In Q1 and now Q2, most companies settled into a wait-and-see approach as our country and community have re-oriented in response to the frightening spread of the pandemic. Marketing and business development have had to take a back seat for some, but the need to keep things moving remained. 

Of the firms I’ve talked to, about a quarter have a positive outlook on the current situation. For some, there has been a notable increase in business because they offer solutions that support the current climate. In some cases, they have been able to replace another process altogether for their clients, or their innovation or service solves an entirely new set of logistical challenges stemming from pandemic management.  

On the other end of the spectrum, about a third of software companies have a negative business sentiment. These companies include those confronting a serious threat to their viability, who have had to lay off personnel or make cuts in other areas. As well as those cutting early on because they know the lifecycle of their business growth will inevitably turn negative. As clients suffer now, so will they.  

Rounding out the business outlook, another third of companies surveyed have a neutral stance. This group is grappling with keeping deals alive, or keeping things in a suspended state of animation, while clients re-orient.  

No two Ottawa software companies are the same. Smaller players with a high impact solution or niche product may be well-financed and able to sail through the storm, ready to resume business as usual post-pandemic. Larger companies may be more susceptible to dramatic drops in revenue, unable to avoid tough decisions in Q2.  

Much of the feedback from software companies highlighted the need for greater flexibility or coherence in government programmes, taxation, and process. Concern over access to qualified talent remains, even with companies freezing their hires. The flow of newly graduating students from post-secondary institutes is suddenly a real concern not just for universities and colleges, but also for some tech employers.  

In all cases, uncertainty stands as the central issue everyone is facing. The absence of industry and government dialogue on shaping an exit strategy is an understandable frustration for some. Still, everyone realizes all hands are on deck now to help our communities, and our country survive.  

We at Invest Ottawa are playing our part to support the tech industry. We are ready to answer questions, take feedback, and engage our partners to achieve solutions. If you need support or simply want to provide us with feedback or help others, please do not hesitate to contact me.  

About the Author 

David Rodas-Wright is the Senior Sector Strategist, Software, at Invest Ottawa. In his role, David provides growth and retention support to Ottawa’s thriving tech sector, with a particular focus on software companies, including Saas Enterprise, Applied AI, Data Analytics, Cloud & Embedded software, Interactive Digital Media, RegTech, FinTech, Blockchain.  

David also supports foreign direct investment attraction. This work includes pitching the Why Ottawa value proposition to prospective foreign companies and delegations, engaging with FDI prospects in-market in target regions, including Europe and the Americas, as well as supporting the soft-landing process in collaboration with Invest Ottawa partners and stakeholders.  

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