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It’s time for BlackBerry to get out of the way of Canadian tech

BlackBerry Q10

“You’re a tech guy, huh? What about BlackBerry? Pretty bad, eh?”

This is the reaction I often get when someone I meet finds out that what I do is all about Canadian technology. Today, I’m afraid to leave the office, much less engage in casual banter while waiting for my double-double.

BlackBerry, of course, announced that it will accept an investment from Fairfax Financial and that another restructuring will mean that the man charged with saving the company, Thorsten Heins, is out as CEO. Shares of the company are down sharply and some are saying this plan is a compromise because no other bidders emerged and Fairfax couldn’t raise the cash to buy the company outright.

It’s not that I don’t care about what goes on at BlackBerry, I do. I have, or more precisely I should say I had, many close friends there. It’s an important company in the entire history of innovation in our country, maybe the most important. But I am beginning to resent its ongoing saga because it is overshadowing a Canadian technology sector that has never been more promising or exciting.

BlackBerry has been in the throes of the media’s favourite storyline: build them up so you can tear them down. The last five years have been the financial technology equivalent to tabloid shots of a celebrity looking terrible in a bikini. The media is staying on the beat, I suspect, because there has always been that chance that a slimmed down BlackBerry would come back gorgeous and fit, with a twinkle of revenge in her eye.

But this isn’t the storyline that I have been following, or the one that many analysts and bankers in the space are consumed with. Sure, we hope that BlackBerry recovers, but mostly we just want the storyline to exit stage left. Maybe go private. Get out of the spotlight for a while. Why? Because there are so many deserving companies ready to shine in BlackBerry’s absence.

Ever heard of Constellation Software (TSX:CSU)? If you’re a casual observer of the tech space, the chances are slim. But check out its chart this year.

csu chart2

What’s more, Cormark analyst Richard Tse say Constellation, which recently passed the $4-billion market cap, has “shocking upside” from here.

Not dramatic enough for you? Surely, then you have heard of Catamaran Corp. (TSX:CCT)? Let’s take a longer look at that chart, this time over the past ten years.

catamaran 10 year

Catamaran has now passed the $10-billion market cap number. The company’s trajectory is unparalleled in the recent history of Canadian tech. As late as 2004, it was plodding along more than a decade after it was founded with just $33 million in revenue. There was no big, splashy Bay Street IPO; the company went public in a reverse takeover of a publicly listed shell, allowing it to raise a relatively meager $10 million in 1997. In 2009, Catamaran, which was then known as SXC Health, took home top spot in Fortune Magazine’s 2011 100 fastest-growing companies list, an honor BlackBerry won in 2009, incidentally.

And what about Canada’s most valuable tech stock? Did you say BlackBerry? With a market cap of just $3.46-billion at press time, BlackBerry trails both Catamaran and Constellation and CGI Group (TSX:GIB.A), which has a current market cap of $10.71-billion. CGI has done pretty well lately, too. Here’s a five year chart.

cgi group, five year chart

And here’s the kicker with Canadian tech: although the innovation sectors have been pacing the Toronto Stock Exchange for more than a year, most of the real activity has been in the world of private tech. You probably heard about HootSuite’s $165-million raise this past summer; it got worldwide press. Or companies like Desire2Learn or Fixmo in Waterloo, which feature a ton of ex-BlackBerry employees. Or Beyond the Rack and Shopify, which are probably better known to techies outside are country than they are within.

Today the airwaves will be flooded with more lamentations about the demise of BlackBerry. Remember, as you gaze upon pictures of a beleaguered Thorsten Heins, that BlackBerry’s woes are a mile wide and an inch deep. Just below the surface is a Canadian tech scene that has never been healthier.

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About The Author /

Nick Waddell
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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