Common Sense Advisory, Inc., an independent business research and consulting firm for the globalization, internationalization, localization, and translation industry has released the ranking of the top 20 language service providers doing business in North America and Europe for 2005. The list, which is based on the 2005 fiscal year, includes Lionbridge (LIOX), SDL International (SDL), and Hewlett-Packard ACG. Welocalize and Skrivanek join the list this year, coming in 18th and 19th, respectively, on this list of translation and localization companies.
“Language industry merger and acquisition activity last year totaled just about US$545 million, give or take a few shekels,” said Don DePalma, chief research officer at Common Sense Advisory. “The Lionbridge and SDL purchases dramatically changed the market landscape, causing translation agencies and ISVs alike to think about their own growth plans, M&A activities, and, of course, exit strategies. That led to activity in the middle market of language service providers turning over $20 to $100 million per year. Companies like Merrill, RWS, TransPerfect, and Welocalize grew by acquiring smaller companies. This trend will continue through the next couple of years.”
Common Sense Advisory estimates that the market for outsourced language services was US$ 8.8 billion worldwide in 2005, growing at 7.5 percent per year to over US$9 billion this year and reaching a total of US$ 12 billion in 2010. Calculations were based on the aggregate revenues of the several thousand companies active in the business, many freelancers, and an approximation of the revenue generated by international and ethnic marketing agencies, boutiques, system integrators, consultants, printers, and other service providers who facilitate translation and localization.
“Others have calculated the size of this market, with their ‘guesstimates’ for the outsourceable language services business ranging between US$2 billion and $29 billion,” comments analyst and COO of Common Sense Advisory, Renato Beninatto. “The low-end estimate of US$2 billion would not cover major commercial and governmental expenditures, while the $29 billion number suffers from a serious methodological flaw in double-, triple-, and even quadruple-counting revenue.”
“Ranking of Top 20 Translation Companies for 2005” is an update to the firm’s 2004 ranking, which was released in July 2005. Both are available for download at http://www.commonsenseadvisory.com/top20