Canadian cloud companies to watch

Keep your eyes on these companies: Asigra Inc., BoardSuite Corp., CiRBA Inc., Enomaly Inc., FreshBooks (a service of 2ndSite Inc.), Nulogy Corp., PollStream Inc., Rypple (2Catalyze Inc.), Teradici Corp., ThinDesk Inc.

It's not a Top 10 list, but these are 10 interesting companies in the space, said Krista Napier, senior analyst of competitive intelligence and emerging technology at IDC Canada Ltd. and author of a new study profiling Canadian-headquartered tech companies that provide cloud solutions.

The companies listed come from all three cloud categories: software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS). "We tried to get a selection of all three," said Napier.

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Keep your eyes on these companies: Asigra Inc., BoardSuite Corp., CiRBA Inc., Enomaly Inc., FreshBooks (a service of 2ndSite Inc.), Nulogy Corp., PollStream Inc., Rypple (2Catalyze Inc.), Teradici Corp., ThinDesk Inc.

It's not a Top 10 list, but these are 10 interesting companies in the space, said Krista Napier, senior analyst of competitive intelligence and emerging technology at IDC Canada Ltd. and author of a new study profiling Canadian-headquartered tech companies that provide cloud solutions.

The companies listed come from all three cloud categories: software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS). "We tried to get a selection of all three," said Napier.

The study also highlights trends, such as the tendency for cloud solutions to be adopted by informal channels first and then gradually adopted by more formal IT or line-of-business users once the value has been demonstrated, Napier said.

Many cloud companies get their solution to individuals through a free version, but this popular cloud strategy doesn't work as well for solutions that promise to deliver high-value service or require a lot of hands-on work, she said.

A further challenge with the "freemium" model is getting customers to start paying for something after they have grown accustomed to getting it for free, said Napier.

The study includes suggestions for emerging cloud companies, such as increasing visibility and legitimacy through partnerships with larger firms.

Some Canadian vendors are receiving positive uptake from organizations hesitant to use cloud services that store or host their data in the U.S. In some respects, The Patriot Act represents a procedure risk to companies since they are subject to the act if they store their data in the U.S., she said.

A very limited number of customers in Canada currently prefer the cloud approach, but Napier predicts the market will pick up rapidly in the next year. "It's still very much a nascent market," she said. "Most solutions are in the early adopter stage."

Customers that are using cloud solutions are realizing benefits such as reduced IT operating and maintenance costs, Napier noted. "In terms of IT planning and budgeting, it's predictable. It's the devil they know versus the devil they don't," she said.

But many remain resistant due to data portability, lack of trust, privacy issues and security concerns, she said. Customers are also not willing to replace their infrastructure yet and still prefer the traditional licence-and-maintenance approach to acquiring enterprise software, said Napier.

IDC estimates the Canadian SaaS market at $150 million in 2008 and forecasts the number will reach $550 million by 2012.

SaaS and private cloud solutions will experience the most significant growth in the short-term, according to Napier, but interest in infrastructure software and packaged software are also expected to increase.

A lot of factors have lead to Enomaly's success, but "there's something to be said about perseverance," said Reuven Cohen, founder and chief technologist. "We've been doing this for a long time, well before there was any talk of cloud computing."