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SDL buys idiom – ¿Dónde es mi traducción software?

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Well looks like SDL did it again. Today they announced the acquisition of Idiom Technologies for $22m. This comes not even 2 1/2 years after they acquired Trados for $60m. If you’re wondering who they are and why you should care – they were the three market leaders in translation management and now there’s no contender in sight.

Translation management is the solution space set around how content gets translated from one language to another. There are two approaches to how translations are handled. One is called machine translation and it is what you see in applications like Babelfish. It does an ok job but languages are rarely one to one translations. The other approach is translation memory and this is where these vendors played. Translation memory ties into authoring tools and remembers HOW you translated before in a certain context. (i.e. for a certain department or to a Mexican Spanish rather than Puerto Rican)   Doing this gets around some of the complexities in grammar you find in many languages.Good reliable machine translation is a relatively new field, translation memory has been around for almost twenty years.

Trados (trivia: TRAnslations for DOS) was the first vendor to offer translation memory. In fact, one of Trados’ early customers was SDL. SDL at the time was primarily a company that performed translations with human translators. One of the tools that these types of companies’ used was translation memory as it allowed them to decrease costs by reducing the number of words translated. Remember these tools would remember an earlier translation so if a document had 100 words you could probably pre-translate 50-75% of these words leaving only 25 words for a human translator to deal with. This worked fine until the internet arrived and suddenly companies needed to translate millions of words. Idiom entered the space offering the ability to perform translation memory on large volumes of words. The only difference was Idiom didn’t want to sell this tool to the translators, instead they wanted to offer this money saving tool to the enterprise.

So here is where we find ourselves back in 2004, just as the internet bubble is recovering. Three solid vendors emerge. Thanks to a new approach to solving the problem, Idiom moves the value of translation to the enterprise telling them that their previous translations should be their cost savings not the translators. Trados, as the leading vendor of translation memory software, realizes that it needs to change its game in order to survive and starts selling to the enterprise. All the while the translators, lead by the giant SDL, think they can simply ignore the problem. But by the 1st half of 2005, the pieces are beginning to fall into place. Globalization Content Management as it’s was now being called is being considered by several major companies and the only two companies with any approach to selling to the enterprise have the largest translation house against the ropes. So as the old saying goes, “if you can’t beat ‘em, buy ‘em.”

Now while from a software market size the vendors are Trados, SDL, and Idiom from a revenue perspective the list is SDL, Trados, and Idiom. So instead of spending $60m on marketing and sales SDL spent it to buy their largest competitor, Trados, and snuff them out of the market. And now 2 ½ years later they still can’t knock out the number 3 players so again why not spend $20m to buy them too. So what is it that allows them to do this? In the first half of 2007 they made over $14m profit(according to their interim statement). So it’s well worth it for them to knock off the competition to ensure that their translation dollars keep coming in.

Then again it’s the customer that may loose because the  best options for enterprise class software for managing  human translation with translation memory are all  effectively reduced to a single vendor.

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Categorised in: Content Management, Enterprise Content Management, Technology, Translation

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