Our Analysts' Insights

The question – since the earliest days of the computerized language industry – has been whether translation companies are so different than other service business that they can’t use generalized software. The argument was that generalized applications, such as FileMaker or Microsoft Word, with vastly more engineers, features, and user communities, would prove more useful in the end than would industry-specific applications and business platforms with small R&D teams and limited feature sets. Time has a way of settling arguments. 

• Data from CSA Research shows that specialized tools dominate the industry (“The Language Services Market: 2017”). Companies with US$5 million or more in annual revenue in written-word services, such as translation, adopt industry-specific tools across the four categories covered in last year’s survey ("Translation Technology Adoption Patterns at LSPs").
   
• Some companies, even in the US$50 million plus crowd, choose generalized business tools, especially for business management. However, even most companies with less than US$500,000 in translation revenue end up adopting either commercial or proprietary software for translation memory, terminology management, and translation management. Although MT is becoming more accessible, larger LSPs still lead in its adoption.
   
• General business tools provide a poor substitute for the language functions of dedicated technology. This means that companies that ignore industry-specific applications are choosing to forego the benefits they provide rather than replicating them with general tools. Although general-purpose ERP tools can replicate some aspects of the process control found in TMS applications, the other categories are not easily replaced. For example, Excel allows LSPs to send terminology lists to translators, but has no actual terminology management capability and cannot integrate with production tools. Similarly, enterprises can store parallel documents, but doing so does not re-create translation memory.

The data reveals increasing focus on proprietary development as companies grow, while commercial tools remain important throughout the life of an LSP.

• By the time they sell more than US$1 million annually in written-word services, more than 20% of LSPs are using custom software for TMS. The numbers continue to grow, for all categories, as company size increases.
   
• By the time they sell US$50 million, nearly half are building software in all four categories – five out of eleven companies in that size bracket.
   
• There’s an increasing tendency for LSPs to ditch commercial tools as they grow, but off-the-shelf solutions still play a role for half the largest companies in three categories, with the exception of TMS, the most likely piece to be proprietary.

The language technology sector has become a very active space with companies competing in many specializations, as well as for comprehensive platform addressing all these categories. The data from the annual Language Services Market research demonstrates the intensity of activity around commercial and proprietary development among translation companies.

• To learn more, check out the recently published “Translation Technology Adoption Patterns at LSPs.”
   
• We analyze software for managing spoken-language services in a separate report, “Interpretation Technology Adoption Patterns at LSPs.”

Does your company develop commercial software for the language industry? Does your company develop commercial software for the language industry? Be sure to complete CSA Research’s Annual Global Market Survey.