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Common Sense Advisory Blogs
Lionbridge Renews Partnership with Microsoft
Posted by Donald A. DePalma on March 8, 2006  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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When news of a quarter-billion dollar deal appears and disappears within the span of a day, we wonder about a failed deal, premature release, or the invisible hand of Dick Cheney. When 2.5 million shares changed hands Thursday based on this ephemeral news, we called Lionbridge to see what's up. The short answer is that someone leaked the story too soon.

Before we called, we did a little math. Since its 2002 contract with Microsoft, Lionbridge has earned roughly 20% of its revenue from its status as Microsoft Premier Partner (a title it shares with the LCJ Consortium, Moravia Worldwide, and SDL). Bowne Global Solutions, acquired by Lionbridge last year, was also a member of that elite team. Twenty percent of the company's s roughly US$400 million in revenue translates into US$80 million last year, or US$240 million over 3 years.

When we connected with CEO Rory Cowan, he would neither confirm nor deny our math, but he did acknowledge that he reached a new deal with Microsoft and that it will involve Lionbridge's hosted service offering, including its Logoport translation memory. Shortly after our conversation, Lionbridge formally issued a press release about the deal.

Cowan told us that Microsoft has sent hundreds of translation memories (TM) to Lionbridge for sequencing. To date, those TMs have been managed by Trados. He also said that Microsoft raised the bar on the service levels it has with Lionbridge as part of this new managed service agreement.

What does this deal mean? Whenever we hear about long-term contracts based on efficiency improvements and mutual benefits for the clients and the vendor rather than on penny-pinching strategies to reduce cost, we rejoice. Microsoft -- after over a decade of experience as one of the biggest buyers of translation services in the world, and after gaining the reputation of taking its vendors to bankruptcy -- has figured out in the last 3 years that a stable relationship is crucial for a function that affects the perception of its products to more than 60% of its customers who don't speak English.

 

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