Leading business globalization and localization industry research and consulting firm, Common Sense Advisory (http://www.commonsenseadvisory.com), has released its technology and business model predictions for the language services and software industries for 2008. From machine translation to the impact of the shrinking U.S. dollar, the analysts include the following as globalization and localization trends for the coming year:
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.