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SDL Acquires Trados
Posted by Donald A. DePalma on June 20, 2005  in the following blogs: Translation and Localization, Web Globalization, Business Globalization, Technology, Interpreting, Market Data, Global Marketing, Best Practices, Supplier Business Issues
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This deal creates by far the largest globalization technology company. Publicly traded SDL's 2004 revenue was roughly $114 million at today's exchange rate (GBP62.7 million), while privately held Trados reportedly turned over more than $25 million. We estimate that SDL directly invoiced about $5 million in software sales, although it claims that upwards of 50% of its revenue is technology-driven. In any case, this deal creates an independent software vendor that will directly book more than $30 million in globalization tool business this year. If successful in marketing and execution, the bigger company will catch the eye of planners looking for ways to improve their global information life cycle processes and transformations.

This acquisition will have some critics: Trados has been the Switzerland of translation memory, terminology management, and translation workflow, offering the only independent desktop-to-enterprise solutions. The only other one-stop-shops were SDL and the Star Group, both companies that will happily sell you tools AND language services. Some rival translation agencies don't like buying core software from SDL or Star, but in this consolidating world, they won't have much of a choice unless someone with deep pockets comes along to meld the best of the independent, point-solution translation memory, termbase, and workflow solutions into a single offering. There are few such candidate aggregators in the offing.
One noteworthy bit is that Trados CEO Joe Campbell will join the SDL Board of Directors. Recruited from content management player iManage when it was acquired by Interwoven, Campbell adds CMS expertise to SDL's plans for a leading role in the global information management business.

This purchase is only the most recent step in the global consolidation of the language services and tools industry. Earlier this year Lionbridge (US) bought Logoport (Germany), Transware (Ireland) bought GlobalSight (US), and Lionbridge is reported to be approaching the altar with Bowne Global (US). As these mergers and acquisitions happen, it will affect buyers who can expect to have their business solicited by rival players, the rival players themselves will re-align their partnerships to match the new polarities of the industry, and venture capitalists and other investors might wake up to some potential opportunities. The one thing we don't see is regulatory agencies in the United States or the European Union getting involved over the potential monopolization of the translation memory industry -- these companies are still too small for anyone in Washington or Brussels to take notice.


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