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| One Good Tool Buy, One Goodbye | |||
| By Donald A. DePalma April 2005 |
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Introduction | ||
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Lionbridge Scores Innovative Technology for a Small Outlay | ||
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Transware Buys into a Market Cheap, But at What Cost? | ||
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Introduction | |
Last month we wrote that Lionbridge acquired Berlin-based Logoport for its translation memory technology and that Irish language service provider (LSP) Transware PLC bought globalization management (GMS) supplier Global Sight. The Lionbridge deal makes sense, while the Transware purchase seems misguided. |
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Lionbridge Scores Innovative Technology for a Small Outlay | |
Lionbridge has yet to publicly announce its acquisition of Logoport, supplier of a TM it has been using internally for two years. Why did Lionbridge buy Logoport? The technical credentials were right: Starting with a clean slate, Logoport produced the first commercial web-based translation memory tool. It takes a fine-grained approach to TM, requires the installation of a single Windows DLL to operate with Word, and works through a browser interface – all key attributes for a successful globalization tool (see “Beyond Global Websites,” Mar05). Lionbridge is already pumping a million words per day through the TMs that it hosts for its translation customers. Logoport’s tiny revenue base meant the purchase price was right, but Lionbridge would only say that what it paid was not material. Is Lionbridge getting back into the commercial tools business that it deserted in 2001? No. Unnerved by the buzz surrounding globalization management (GMS) suppliers like Idiom in late 1999, Lionbridge at first productized its translation management system but quickly exited the commercial market. Since then the company has purchased, built, and integrated translation management software to improve the productivity of its translators and project managers. It closely controls the environment on which its infrastructure runs, thus focusing a limited R&D budget more tightly than SDL or Trados which must support a broader range of customer needs over a wider variety of platforms. Our rating: This purchase ranks as an excellent deal for Lionbridge and its customers. While it is bad news for the handful of Logoport users, this acquisition will make an innovative TM product accessible to a much bigger pool of clients. It also means that potential globalization software consolidators have fewer choices when it comes to fine-grained TM. That will be good news for translation memory tool suppliers like KCSL, Lingua & Machina, and MultiCorpora who might find their M&A dance cards filling up. |
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Transware Buys into a Market Cheap, But at What Cost? | |
In late March Global Sight notified several firms to which it had shopped itself that it was being acquired by Transware. The purchase cost the Irish agency a tiny fraction of the tens of millions of dollars that venture capitalists such as Draper Fisher Jurvetson invested in Global Sight over the last six years. We spoke with new Transware CEO Tom Kelly who told us that the LSP will use Global Sight’s Ambassador GMS for its own production needs, but will still sell it into the general market. Improving Transware’s internal production systems with Ambassador has clear benefits, but selling it as a standalone product raises several questions.
Another strategy would yield better results. Transware yanks Ambassador from the market and bulletproofs it for its own use. In so doing it finds that it acquired a stable product platform much quicker than it could build one itself, spent less cash than purchasing it from Trados, and incurred less risk than relying on rival SDL. Transware increases its production efficiency and improves its cost structure, but avoids diverting resources to the quixotic pursuit of a software business. |
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One Good Tool Buy, One Goodbye | |
By Donald A. DePalma
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. |
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