Software development and computer services, 2016
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Released: 2018-03-19
In 2016, operating revenue for the software development and computer services industries was $62.9 billion, up 7.4% from 2015. The three industries classified to the software development and computer services industry group are: computer systems design and related services, software publishers, and data processing, hosting and related services.
Computer systems design and related services, the largest of the three industries representing 77.5% of this industry group's operating revenue, generated $48.7 billion in operating revenue, up 6.6% from 2015. Operating expenses increased by 8.0% to $43.6 billion, resulting in a decrease in the operating profit margin to 10.5%.
Most of the sales for the computer systems design and related services industry (43.5%) were derived from information technology technical consulting services.
Software publishers, the second-largest industry representing 14.4% of this industry group's operating revenue, produced $9.1 billion in operating revenue in 2016, up from $8.4 billion a year earlier. The operating expenses increased by 9.9% to $8.6 billion, generating an operating profit margin of 4.8% in 2016, down from 5.9% in 2015.
Sales for software publishers were derived mainly from application software publishing (37.5%) and system software publishing (25.7%).
Data processing, hosting and related services, the smallest of the three industries, generated $5.1 billion in operating revenue in 2016, up 14.2% from 2015. Operating expenses of $4.5 billion in 2016 yielded an operating profit margin of 10.9%, down from 13.4% in 2015.
Most of the data processing, hosting and related services sales came from the sales of hosting (53.6%) and information and document transformation services (31.7%).
As this industry group is labor-intensive with a highly-skilled workforce, the largest expense item for each of the industries was salaries, wages, commissions and benefits. Salaries, wages, commissions and benefits represented 50.2% for software publishers, 45.6% for computer systems design and related services, and 37.5% for data processing, hosting and related services.
Sales to the business sector in Canada accounted for the largest share of sales by type of client for each of the three industries, amounting to 61.4% for computer systems design and related services, 58.3% for data processing, hosting and related services, and 55.0% for software publishers.
Sales to clients outside Canada represented the second largest share of sales by type of client for each of the three industries, amounting to 41.1% for software publishers, 37.9% for data processing, hosting, and related services, and 25.9% for computer systems design and related services.
The remaining client base was split between sales to government and not-for-profit and public institutions and sales to individuals and households for each of the three industries.
Note to readers
Data for 2013, 2014 and 2015 have been revised.
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