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Double the Language Challenge
Posted by Donald A. DePalma on June 1, 2005  in the following blogs: Translation and Localization
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Jim Fagan kicked off the panel with an optimistic assessment of language industry growth, citing a 10% figure. The other supply-side panelists concurred. When pressed on this number given recent quarterly shortfalls, the vendors members of the panel pointed to double-digit growth in some market sectors like pharmaceuticals and future increases in the financial sector as reasons for their confidence. The information technology sector, long a bastion of localization and translation, will account for much less growth than in the past. Fagan said that 40% of Bowne's business is now IT versus 85% just five years ago.

The buy-side members of the panel -- Microsoft, Oracle, and SAP -- talked about their use of various language tools. The vendor panelists characterized these IT companies as 10-15 years ahead of the general market in using technology to manage the translation process and increase productivity.

Heinz Lueken noted that "nobody buys SAP over Oracle or Oracle over SAP over the quality of the language" in the documentation. With functionality and business issues trumping translation, that makes it harder for language service industry to highlight their importance in the global content value chain.

Bernhard Kohlmeier said that Microsoft currently populates its knowledge base with automated machine translation from English into French, German, Italian, Japanese, and Spanish. Is MT good enough? "When your server is down, you're looking for information, not poetry." He also noted that Microsoft now supports nearly 100 languages for some of its products.

When we asked whether machine translation and other technologies would alter the role of language service providers, the panelists said they could see some changes on the horizon. For example, Mark Lancaster said that "once you do XML, then desktop publishing and engineering tasks go away."

Our take: The high-tech companies do indeed lead the market in using translation technologies. Their learnings could help firms in other sectors accelerate their globalization plans, especially for corporate websites. However, on the question of the changing role of language service providers, we believe that in five years today's top suppliers will have very different business models and add much different value than they do today. Their challenge will be to follow re-invent themselves as big service buyers like Microsoft and Oracle chip away at the LSP value proposition using XML, machine translation, and professional procurement practices.


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