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Idiom Prices LSP Advantage
Posted by Donald A. DePalma on June 29, 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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Last month Idiom announced that it would package its WorldServer product for language service providers under the "LSP Advantage Program." Idiom didn't name a price, so we grumbled that the company's pricing model wouldn't get it much business; the standard license costs US$125,000, an average configuration goes for $250,000. Training, integration, and annual support costs would add much more. We speculated that most LSPs would sit on the sidelines until Idiom comes up with an LSP-friendly pricing scheme.

This week we called VP of Marketing Dave Rosenlund to see what LSP Advantage would cost. His answer -- "how about free?" Idiom decided that one way to get some attention in the marketplace would be to give away the software. The company will start a beta in August for 6 language service providers. Participants will receive free software and training.

Following beta, a WorldServer license will still be free for internal use by LSPs who pay a "modest" support and maintenance fee. Idiom will use the field test to determine how much support an LSP requires and set the support fees accordingly. Rosenlund said Idiom already understands that the enterprise model for support -- typically 15-25% of the software license price -- will not be appropriate for LSPs. He said Idiom's goal is not to make money on sales to language service providers, and that it will charge just enough for support to cover the company's costs of supporting LSPs.

So how does the LSP Advantage program help Idiom? Exposure and referrals. Idiom wants to become the safe haven for LSPs needing translation workflow to improve productivity, but who would be unhappy about buying it from a competitor like SDL or Star. It will ask LSPs to display a "Powered by Idiom" logo on their websites. Rosenlund expects that LSPs using WorldServer will refer customers to Idiom whenever they see SDL pitching a combined service-plus-software sale. While Idiom's globalization management pedigree didn't light many fires, its XML-centric global authoring and publishing system seems to have struck a responsive chord. Clients might bite on this more compelling product offering.

Will Idiom succeed where others have failed? Trados tried to sell its TeamWorks GMS to LSPs, but found few takers. Its problem was a greedy pricing scheme not suited to LSPs -- it tried to charge the service provider for installation and integration, annual support based on the full license cost, and fees for each word that passed through the system. This didn't excite many LSPs. We think that Idiom's pricing strategy has a better chance of attracting translation agencies. A free license, no per-word fees, and low-cost support remove much of the risk. However, LSPs will have to dedicate resources to learning and administering WorldServer, but using a standards-compliant packaged solution means not having to build, enhance, and manage their own translation workflow. And not having to buy a commercial product from a competitor will be an added bonus.

Idiom's pricing gambit is just the first competitive reaction to SDL's acquisition of Trados. We expect that initiatives like this one will continue re-arranging the competitive landscape for months to come.


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