Clarus Securities Highlights Tech’s Resurgence at Montreal Conference

Toronto-based Clarus Securities held its first Growth & Innovation Conference yesterday at the Ritz-Carlton in Montreal, bringing together eight of Canada’s most interesting publicly traded companies.

After opening remarks by Mark Pavan, Clarus’ managing director of investment banking, presentations were made by CGI Group, Redknee Solutions, Slyce, Espial Group, VIXS Systems, Urthecast, Intertain Group and Amaya Gaming, whose Chairman and CEO David Baazov also won the Tech Exec of the Year award at the Cantech Investment Conference in January.

“What do these eight companies all have in common?” asked Mark Pavan during his opening preamble.

“When you look at companies that Clarus wants to have a relationship with, we try to think about big ideas. The three big ideas that we focus on are, first and foremost, this idea of ubiquitous M&A. In 1996, 80% of the exit strategies for technology companies were actually to go public. This year, in 2014, it’s less than 10% in the United States. So 90% of the time, you’re actually going to get bought versus go public. That ubiquitous M&A has really come from a single factor and that’s that connectivity got easy. We can connect things now, very easily, and it’s quite ubiquitous. So this idea of ubiquitous connectivity really is the first idea that all of these companies have capitalized on. These companies wouldn’t exist without this connectivity.”

“The second big idea is this idea of compressed product cycles,” referring to the fact that incumbent technology companies from the 1990s, such as Microsoft, remain dominant and difficult to dislodge, whereas newer platforms, like the Apple iOS platform and Android have become omnipresent after only four years of trying.

“IP alone is no longer a significant barrier to entry,” implying that execution is more important than merely having the idea. Pavan reminded the crowd of a famous quote by Bill Gates, who reportedly once said, “Intellectual property has the shelf life of a banana.”

The last big idea that Pavan focused on was a chameleonic mixture of concepts that link technology companies to the end consumer, including “the last mile”, distributed computing (aka. the cloud), the client server model, persistent connectivity, second screen, all of which culminate in a mobile computer or smartphone.

“Without this,” he said, holding up his smartphone, “the companies you’re going to see today wouldn’t be as successful as they are. A big part of their strategy revolves around the derivatives of this smartphone, what we now refer to as the cloud, and the ubiquitous nature of this device, that is essentially a continuous connection to the last mile for a user, whether you’re at home, whether you’re at work, wherever you are, a technology company can get to you.”

Indeed, each of the eight companies presenting at the Clarus Growth & Innovation Conference are examples of the three types of ubiquity that Pavan referred to.