SDL Acquires Language Weaver. First Reactions.

Other experts like Kirti Vashee and my former colleagues from Common Sense Advisory will certainly post more detailed analyses of this news, but I wanted to document my initial reactions to what was announced today by SDL and LanguageWeaver, the first developer of a commercial Statistical Machine Translation software.

In recent months, I have been thanking SDL for the great job that they are doing at alienating their technology customers by providing sub-par customer service and support. Clients contact us at Milengo looking for alternative solutions, which we are happy to recommend. SDL has been very successful at irritating translators, LSPs, and final buyers with their technology approach.

LanguageWeaver, a pioneer in SMT for commercial purposes, has struggled to sell a product profitably, when it has to compete with free solutions like Google Translate and MOSES. It's main client is the U.S. government and the main language pair is Arabic-English. In fact, the announcement points out that in 2009, the company had a loss of $1 million for revenues of $12.2 million.

So why is SDL paying $42.5 million (or 3.5 times revenue) for a company that loses money?

I believe that -- whether it works or not, and whether it is deployed or not -- acquiring a software company is something that investors at the London Stock Exchange put a very high value on. This is a good story that will boost SDL's stock, just as the IBM Websphere MT deal boosted Lionbridge's stock to the levels that it is today (from one dollar to $5.28). This is a good story that helps SDL to further position itself as a software company instead of a service company.

The second benefit for SDL, is opening a door into the U.S. government R&D funds through DARPA. LanguageWeaver has advanced mostly because of the availability of such funds.

I don't see the technology itself as a major game changer for SDL. SDL had already acquired Transparent Language, a Rules-based Machine Translation developer, and not much has been heard about that technology since. After a little time, LanguageWeaver might take the same route as Idiom's Worldserver, which was growing fast and was virtually discontinued by SDL.

If the patterns of previous acquisitions prevail, SDL will get very excited with LanguageWeaver, but after the excitement wears off, the product will be abandoned to its own fate. So LanguageWeaver clients who already work with Trados, TMS, and other of their products already know the level of service provided by SDL, and should maybe run for the hills when they come offering LanguageWeaver solutions.

Finally, for competitors -- unless SDL gets its act together -- they have nothing to fear. Just keep providing excellent customer service. That's what Milengo does.

Some Trends in the Localization Industry

In preparation for the Vendor Management Seminar that will be held in Las Vegas later this month, I have been doing some thinking about trends in the industry that affect the services provided by companies like Milengo, and thought you might be interested in them.

There are three trends that I have identified:

• Disintermediation and Collaboration: The vast improvement in the quality and reduction in cost of online collaboration technology -- combined with the widespread availability of affordable bandwidth -- is leading LSPs to redesign their production workflows to remove unnecessary steps and activities from their processes. A clear result of this trend is that larger LSPs are going back to working with individual translators instead of using single language vendors as intermediaries, especially in projects involving time-sensitive or dynamic content.
• Productivity Boost: The incorporation of machine translation engines and shared translation memory environments into the desktop productivity tools of translators will result in a massive increase in the number of words that a professional translator can process in a day. Averages will jump from 2,500 words to 15,000 to 20,000 words per day in the first stage, reaching even higher numbers in the near future.
• Role and Cost of Technology: Translation technology tools like translation management systems and desktop translation memory software are unusually expensive for the value that they provide. As Chris Anderson points out in his book “Free," software and content want to be free. What creates value are the services provided around technology, not the technology itself. So, I have predicted that Translation Memory technology will be free or become irrelevant by 2015.

What are the implications of these trends for buyers? In a nutshell, more words will be translated in a shorter period of time at a lower total cost.

In general, I believe that because Milengo positions itself as a technology agnostic and customer service-focused organization puts it in the right position to succeed in this new market reality.

If you haven't registered yet, don't miss the opportunity to send your vendor managers to the IMTT event in Las Vegas. IMTT consistently organizes the best training events in translations industry.