Merlin: Translation News, Services & Directory

Just what you need — another list of predictions for the coming year! A few more days before the holidays might be more useful, but we can’t help you there. But lists we have. Here’s are 7 things that we see happening in the business globalization practice, service, and technology space in 2008:

1. Foreign exchange drives more translation and shifts production centers. The shrinking U.S. dollar signals an opportunity for companies in markets with strong currencies to get more translation for less money. Meanwhile, the same euro-dollar exchange rates will cause pains for language service providers billing in dollars but paying for staff and utilities stronger currencies; many LSPs will bill even their American customers in euros and look for translators they can pay in dollars. While they’re shopping for bargain-basement iPods and Hermès scarves in New York and Chicago, non-American LSPs will look to buy U.S. vendors. Meanwhile, a weak dollar may translate into more exports for American companies – thus increasing the need for translation services in the United States. But with U.S. rappers flashing euros instead of Benjamins, it’s time to hedge your dollar-denominated investments.
2. Technology from new sources breaks traditional translation molds. The wave of new language technology that started in 2005 will continue, productizing new approaches from East and South Asia, Eastern and Central Europe, and the Middle East. Besides the switch in geography, firms closer to the corporate mainstream like acrolinx and MadCap will add multilingual functions, thus enabling cross-border marketing, CRM, and customer service applications. Open source devotees will add even more options to the multilingual support mix. Meanwhile, mash-ups will plant the seeds for a gmail-like translation memory software as a service.
3. Terminology pushes to the forefront. Terminologists will start to be seen as the druids of the translation process in 2008. Early adopters at IBM, Medtronic, and SAP will feel vindicated in their long-term, systematic attention to terminology. Companies at the third and fourth level of the Localization Maturity Model will begin paying for full-time terminologists. In fast-moving companies, Wiki technology and other collaboration tools will move terminology from a fervent hope to more of a mainstream function. Vendors of terminology management tools will feel pressure to open their product’s application programming interfaces.
4. Language service buyers cluster at two ends of the management spectrum. The high, often unknown cost of translation across the enterprise will combine with foreign exchange pains to renew efforts at centralizing purchases. Driven by global supply chain successes elsewhere in their companies, vendor managers at large buyers like EMC, HP, Sun, and Symantec will exert their influence and purchasing power to control the process. Their efforts could lead to the creation of a Language Vendor Management Association – as if anyone needs more conferences to attend.
5. Language industry standards still fall short on offering value. With increased interest in open content, collaboration, and networking, the Open Document Format, DITA, and XML in general will get much more attention in content lifecycle applications, both domestic and global. However, language technology standards like TMX and TBX will still be hobbled by the small-mindedness of vendors who focus more on switching users to their technology rather than openly sharing linguistic assets. Lingering questions about the value of ISO9000 will hobble the acceptance of ASTM and CEN process specifications. Buyers will still seek the safe haven of open content and translation management solutions, but will find themselves turning to third-party middleware rather than wait for the vendors to document and support their interfaces.
6. The quest for more traffic will drive machine translation. Despite the efforts of MT aficionados, revenue will remain inconsistent with marketing buzz. Observing the success of Google and Microsoft in driving traffic to their sites, MT suppliers like Language Weaver, SDL, and SYSTRAN will scramble to find new ways to get their engines in front of more eyeballs. They will also trumpet the concept of more on-demand translation of user-generated content for marketing and product development; for the near term, most such activity will revolve around social networking and search sites.
7. Suppliers seek differentiation or an exit. Several companies in the Top 20 will seek professional managers from outside the industry. Other LSPs and some technology vendors will burn the midnight oil planning for organic growth, acquisition, or an exit strategy. Who will buy? Expect to see venture capitalists, private equity firms, and sovereign funds to kick the tires of the bigger or more profitable industry players. With many LSPs already operating internationally, it won’t be a surprise to see Wipro, a long-awaited presence, showing up in deals both as an acquirer and a competitor. Wipro spent the last year having the companies they were courting educate them about the industry and reportedly investing in some European players. The late 2007 departure of chief marketing officers from Lionbridge and SDL will underscore the difficulty of convincing buyers that any one LSP is different from its competitors. As we’ve been saying for several years, public relations will outscore traditional marketing and advertising – especially with the miniscule budgets associated with the language industry.

Click here to see how well we did with our predictions for 2007.

Last December we stared into our crystal-ball-as-a-service software to predict what would happen in 2007. Here’s how we did:

1. Translation automation technology and distribution morph. We predicted rapid product turns, innovated distribution, and new market models from smaller firms; increased use and consideration of statistical MT solutions; and newbies would enter the market and challenge the dominant tool and service paradigms. Crystal ball assessment: Goal! The language technology sector really showed some innovation in 2007. Next up for them is figuring how to make money.
2. CMS-TMS saddle up some partnerships — again. We predicted continued growth for translation management solutions from Idiom, SDL, and newer entrants. We also said there would be more private-label integrated solutions between TMS and CMS vendors. We also thought there would be more substantive CMS-TMS partnerships. Crystal ball assessment: Growth for TMS certainly happened, but private labels didn’t. Partnerships blossomed, as with Lionbridge’s opened API. And even we were surprised when SDL bought Tridion.
3. Vendor management gains visibility. Sourcing translators mostly amounts to maintaining rudimentary databases of professionals. We predicted that this reactive function would benefit from initiatives like the Translator Profile Exchange (TPX). Crystal ball assessment: TPX went nowhere. There was increased awareness of vendor management and some forward movement, but not as much attention as we thought there would be.
4. Mash-ups find their tongue. We expected to see some interesting multilingual mash-ups like a directory service tied to Google maps that sends an SMS to interpreters in the vicinity of a courthouse or hospital that needs language help. We also thought Proz and DotSUB might mash up for some pro bono subtitling. Crystal ball assessment: There was a lot of talk about this one, but little delivery except for our primer on how such mash-ups should happen and Google’s translation bots. Score slightly above zero for the home team on this one.
5. Private equity expands its role in the language market. We expected to see more investment from the venture firms anxious to spend down their funds. We looked to a roll-up of smaller LSPs or globalization software vendors into a larger, more viable firm. We also blue-skied taking a public language services or technology company like Lionbridge or SDL private, slicing and dicing costs, adding a few smaller acquisitions, and wrapping it up for a new offering in a year or two. Crystal ball assessment: Since July 2006 we’ve had lots of discussions with financiers thinking about entering the market, but no one has thrown the dice yet. They’re still asking.
6. Government suppliers eye commercial markets. We thought that a Democratic Congress might have some impact on U.S. foreign policy. Further, we said that government-focused LSPs would look to the commercial market seeking higher margins and a new source of revenue to please shareholders. We predicted success wouldn’t come easy. Crystal ball assessment: Who would have thought a year ago that the U.S. would be spending US$3 billion per week in Iraq and that Congress would be as deadlocked and ineffective as it has been? L-3 did lose the biggest language deal in history, but it continues to appeal. The government suppliers would be out of their minds to change their business models now. Memo to self: “Get Common Sense Advisory certified as a government contractor.”
7. India invests in deconstructing the Tower of Babel. We wrote that more and moreore work is being done in India as high-tech vendors like Cisco, EMC, Microsoft, and others build centers of competence there. We said that this shift virtually guarantees that major decisions about product localization will be taken in Asia. As early as 2004, we predicted that Indian companies would enter the language services market. Crystal ball assessment: Cisco now characterizes its Bangalore center as its second headquarters, Wipro has learned from the LSP masters and now exhibits at Localization World, and Indian outsourcing is part of every IT services plan.
8. The China card still baffles many. We wrote that North Atlantic translation agencies would continue to buy low-cost production centers in China, but that economics will set the stage for future M&A originating in Asia. We said that you should expect to see Chinese fact-finding missions visit American and European LSPs to learn how to sell translation and produce world-quality output. Crystal ball assessment: Chinese BPO, ITO, and LSP firms are opening offices around the globe (for example, CSoft) or going public on the New York Stock Exchange (VanceInfo, née Worksoft). China is now part of the outsourcing equation for many North Atlantic firms.

Not bad, but not perfect either. Let’s see how well our conjectures for 2008 play out.