SDL, Idiom and the state we are in
If a $22 million transaction can shake up a $10 billion industry even a little bit, you wonder what state this industry must be in. The acquisition of Idiom by SDL stirred up discussions of awe and despair. Many people loved Idiom for what it was: independent, neutral, the Switzerland of the translation industry. WorldServer was the technology that would make translation easy and attractive for every user. But let's face it, the company was performing poorly, and had lost too much money over the years. The investors had lost their appetites. Even though WorldServer could automate, let's say, 20 of the 40 steps in the process, it was not the sort of magic solution that excited a global executive. End of story....
Paradox
In this age of globalization you would expect the translation industry to be ten times bigger. The flow of information that requires translation is immense and is growing everyday. The economic wisdom of demand and supply, however, does not seem to apply to this industry. Translation is one of the most cumbersome processes for business to manage. It is slow and costly. Professional translation resources remain scarce. Technology - usually the answer to such dilemmas - has been of little help in the translation industry. The size of the translation technology sector is miniscule. Add up the revenue numbers of the translation technology companies - including Idiom - and you possibly get to a figure of around $100 million. There can only be one conclusion: translation is too complex and the technology is not good enough.
Old school thinking
In this context SDL's acquisition of Idiom makes perfect sense. By monopolizing the little technology that is out there, SDL buys time and market share. If you own the technology you potentially own the services. Since translation technology automates only a fraction of the process, the ratio between technology and services is very favorable for companies like SDL. Every Euro in technology comes along with perhaps ten Euros in services. It is a good example of old school thinking: locking the customer into your services. Everyone does it. And the weapons used in this battle for customers are not always proprietary tools. They may be assets such as ownership of data, or translation memories, or the kind of knowledge and experience that make customers nervous about switching. Many translation companies have convinced their customers that they have a monopoly on linguistic quality. It is only natural.
Wrong customer
Old school thinking can easily turn into complacency and self-righteousness. The translation industry has lost sight of its bigger mission in the global economy. New technologies, rules and regulations, medication, politics, and entertainment must all be made accessible for consumers, citizens, taxpayers, and patients speaking different languages around the world. The industry is failing miserably in this mission. It is only scratching the surface, squeezing out only a fraction of the words that are waiting to be translated. The real customer is not the buyer at Microsoft, Philips or the government. Old school thinking tends to undermine values and become destructive, especially if it is focused on the wrong customer.
Localization business innovation
But old school thinking can also offer a very fertile environment for business innovation. The question was asked in a TAUS survey whether the localization business model and payment structure are out-of-date and in need of revision. Sixty-five percent of the respondents agreed that it was. However when we assembled a group of localization leaders at the TAUS Forum in Brussels last November to explore new business models, the brainstorming essentially resulted in a confirmation of the status quo. This well-established industry prefers to close its eyes to disruptive innovative trends such as crowdsourcing, machine translation, shared language data repositories and language service enabling plaforms. Mission dismissed.
Convergence
The most likely scenario for the translation industry is therefore that it will become featurized or marginalized inside other solution offerings. Think in terms of convergence, like cameras becoming a feature in telephones. Translation then becomes a feature in, for example, search portals, software applications and customer support sites. Other business sectors will jump on the tremendous global translation opportunity with a dedicated focus on the real customers. As many localization buyers understand very well, this sort of challenge requires genuine out-of-the-box thinking, revolutionary pricing and fundamental changes in the business model. New terms are entering the localization conversations - 'user experience' and 'content eco-system'. One thing is clear: we have moved from a push-model to a pull-model. It does not matter what the publisher pushes out to the market; it is the user who is in command. Welcome to a new world.