When software Goliath Microsoft Corp. expands operations, people notice. After all, Microsoft doesn’t trust its operations to just anywhere. In fact, when it comes to the company’s critical software development centers, the company has only a handful of sites outside its Redmond, Wash., headquarters.

In July, Microsoft revealed it would open a new software development facility. Consequently, Vancouver, British Columbia, in western Canada, will join an elite but diminutive list of other development center hosts comprised of North Carolina, Ireland, Denmark and Israel.

What makes the Vancouver metro a rising star for Microsoft? Without a doubt, its people make up one key element.

Those familiar with the progressive information technology (IT) industry are not surprised by Microsoft’s decision; Canada is seen as a land of great intellect, economic potential, and technological innovation and resources, especially when it comes to high-tech and IT ventures.

Additionally, the region’s quality of life will be instrumental in attracting new talent.

“Microsoft is a global company, and our greatest asset is smart, talented, highly skilled people,” said S. Somasegar, corporate vice president of the Developer Division for Microsoft. “Our goal as a company is to attract the next generation of leading software developers from all parts of the world, and this center will be a beacon for some of that talent.”

“In collaboration with our Redmond head office, we determined that opening a regional development center in Canada would create a tremendous opportunity for Canada,” said Phil Sorgen, president of Microsoft Canada. “We have long advocated that Canada would be a wonderful place to locate Microsoft development. We have burgeoning high-tech and software industries and a globally envied quality of life, and our cities represent exactly the kind of environment that leading information workers want to live in. This center will help Microsoft remain globally competitive, while providing strong economic benefits to British Columbia and Canada.”

Basement Beginnings

While Canada is home to Fortune 500 players, it is also fertile ground for homegrown IT success stories. To gain a clear understanding of what exactly Canada really offers these enterprising gems, put some of these companies under the microscope, such as Desire2Learn Inc.

Begun in a Waterloo, Ontario, basement apartment by John Baker, founder, president and CEO of the company in 1999, the company has exploded into a provider of enterprise eLearning solutions.

“As a student at the University of Waterloo (UW), Mr. Baker approached one of his professors and asked to put his course content online,” said John McLeod, director of marketing for Desire2Learn. “At the time, the eLearning environment was virtually non-existent at UW, but the professor agreed.”

Today, Desire2Learn is headquartered in Kitchener and is recognized as an industry leader for its suite of tailored enterprise software products and professional services, which support more than 4 million learners worldwide. Clients include primary schools, institutions of higher education, associations and government organizations. The company currently employs 150 workers, the vast majority of which are located in Canada.

McLeod said it only makes sense for the rapidly expanding company to retain its roots in the Kitchener-Waterloo area.

“The proximity and affiliation with local universities provide an endless source of innovation and talent pools, unlike anywhere else in Canada,” he said.

The company has showcased an enviable rate of growth and has significantly expanded its headquarters operations during the past year and has plans for further growth.

For educational institutions, Desire2Learn’s ability to flourish is a tremendous asset.

Testament of the company’s appeal to educational institutions was evident in October when the University of Akron (Ohio) selected Desire2Learn to provide a robust and scalable learning environment to its more than 24,700 learners for online and Web-enhanced delivery.

The school was seeking a single solution that would meet its diverse needs as a large research university. After an extensive and in-depth evaluation period of Desire2Learn’s eLearning products, the university was confident in the stable, integrated system it had found.

“University of Akron students, faculty and staff reviewed several learning management systems and unanimously chose Desire2Learn,” said John R. Savery, director of learning technologies and scholar/learner services for the University of Akron. “Clearly, Desire2Learn will best allow our professors to enhance online learning environments, in turn further enhancing the educational experience for our students.”

Talent Triangle

Desire2Learn is located in the hub of Canada’s technology industry: a long popular region known as Canada’s Technology Triangle.

In fact, the Kitchener-Waterloo area comprises one-third of the Triangle.

It is in this region, which is anchored by the cities of Cambridge, Kitchener and Waterloo, where IT companies are collaborating, networking and flourishing on the leading edge of innovation.

Accordingly, the University of Waterloo has the largest pool of mathematics and computer science talent anywhere in the world, said John Tennant, CEO of Canada’s Technology Triangle Inc.

“Bill Gates attests to Waterloo’s reputation,” Tennant said. “A year-and-a-half ago, he said, ‘There are many years where Waterloo is the university we hired the most people from of any university in the world, and Waterloo has always been in the top five every year.’”

“Relationships with universities and colleges are obviously important, and this is where Canada’s Technology Triangle is an optimum choice with the presence of four outstanding post-secondary institutions providing the intellectual and research capacity,” Tennant said.

Additionally, beyond federal tax incentives, there are refundable Ontario tax credits for companies that work with colleges and universities.

The region’s 20-year success story is founded on a long history of entrepreneurship, technological leadership and skills, which has been evidenced by several hundred successful spinoff companies from the University of Waterloo.

Tennant said Canada’s Technology Triangle provides a dynamic ecosystem in which companies that seek to be on the leading edge of technology are thriving.

Another company exceling in this region is Internet search engine provider Google.

In September, the iconic high-tech firm announced it would move its Waterloo Engineering office into space at TechTown, a professional services building located at the University of Waterloo Research + Technology Park.

“It’s very important for us to develop a strong relationship with the University of Waterloo and with its students and researchers,” said Stuart Feldman, vice president of engineering for Google. “We are actively recruiting top engineering talent to join our team in Waterloo to work on innovative and challenging projects.”

Toronto Tops in Digital Media

All throughout Canada, high-tech companies have found location assets necessary for their individual needs. And for companies involved in the the digital media field, Toronto provides a potential site location.

The Toronto region recently ranked at the top of a study by IBM’s New Jersey-based Global Location Strategies Team, which compared Toronto to six of the world’s most successful Information and Community Technology (ICT) venues. Other regions studied were Bangalore, India; Boston; Frankfurt, Germany; Manchester, England; San Jose, Calif.; and Washington, D.C.

Toronto presented the third-largest ICT cluster in North America and ranked as the most ideal location in two subsectors: digital media and professional shared services.

In digital media, Toronto received high marks for its strong base of creative industries, its large pool of computer programmers and creative media talent, and its attractiveness as a place to live for international recruits. The region also received high grades for quality and came in second only to Bangalore for its low-operating costs.

“This report confirms that as part of the Toronto region’s impressive ICT story overall, our digital media story is exceptional,” said Mike Williams, senior vice president of investment attraction for the Toronto Region Research Alliance (TRRA). “Compared to ICT regions worldwide, we offer an extraordinary combination of outstanding R&D, top talent and advanced digital media industries.”

There were thousands of data points — including business environment, infrastructure, potential to recruit staff, language skills and relative operating costs — which were considered in the study.

Officials pointed to such success stories as Toronto-based Side Effects Software, creator of one of Hollywood’s most used special effects and animation software programs.

“It makes good business sense for us to be in Toronto,” said Kim Davidson, CEO of Side Effects Software. “The region offers us highly skilled employees from regional colleges and universities, as well as the opportunity to partner with research labs and local production facilities.”

Side Effects’ Houdini software has been used in more than 200 feature films, including the “Spider-Man” and the “Harry Potter” series, as well as the “Lord of the Rings” and “Matrix” trilogies.

Montreal’s Multimedia Side

Another of Canada’s hotbeds of talent is Montreal.

With a network of higher education institutions, Montreal boasts an exceptionally stimulating intellectual environment.

With 11 institutions of higher learning, including four major universities, several colleges, and many private and public schools, Montreal ranks first among major North American cities in terms of density of university students.

The city also ranks first in Canada and ninth among the 25 largest North American cities when it comes to the number of research centers.

As a hub of technological excellence, the Montreal ICT sector includes a critical mass of companies and experts in manufacturing, software, computer services, telecommunication services, interactive digital media and services, audiovisual and digital sound, and digital arts.

Software developed by Montreal-based ICT companies, including Softimage, Autodesk and Hybride, was instrumental in Hollywood productions like “Titanic,” “Jurassic Park,” “Godzilla,” “Plane,” “Sin City,” “Sky Captain,” and the “World of Tomorrow” and “Spy Kids” trilogies and the television series “Napoleon.”

A host of multimedia companies have tapped into the intellectual infrastructure of Montreal, proving that Montreal can deliver when it comes to high-tech support.

In fact, two companies announced expansion plans in Montreal in November.

Amusement Cyanide Inc., one of France’s largest video games development studios, revealed that it would set up operations in Montreal as a means of entering the North American market.

The company, which has produced a variety of successful games, plans to hire as many as 65 employees during the next three years.

Montreal’s video games sector is represented by more than 50 companies and about 5,000 employees.

“Montreal is a logical choice,” said Fabrice Granger, general manager for Cyanide Montreal.

Less than a week after Amusement Cyanide’s announcement, California-based Javaground said it would open a production studio in Montreal.

The company, which specializes in the development of video games and tools enabling the deployment of games and applications across mobile phones, plans to hire 15 employees and tap into the area’s resources.

“Montreal is a North American leader in game development,” said Alexandre Kral, president and world CEO of Javaground. “By opening a studio here, we will be able to benefit from the know-how of the region’s experienced professionals. In the near future, we believe that Montreal will become one of our most important development centers. Furthermore, we are investing more than $1 million this year to ensure the growth of our Montreal-based team.”

Canada’s vast communications and IT infrastructure have firmly positioned the country in a leading role when it comes to technological advancements.

Roughly 32,000 companies make up Canada’s information and communications technologies (ICT) sector, and more than 545,000 people are employed in the industry.

Perceived as a gateway to global markets, there is virtually no limit to what high-tech companies in Canada can achieve.

With major metropolitan areas like Vancouver, Waterloo, Toronto, Montreal, Calgary, Quebec City and the province of Nova Scotia notably committed to furthering this industry, it’s of little wonder that IT companies have found plenty of business advantages to build on.

In an industry where the stakes are high and costs must be minimized, while intellectual talent is maximized, Canada offers genuine solutions for the ever-changing needs of this fast-paced industry.