Last week, I asked for reactions to the SDL/TRADOS acquisition and boy did I get an earful, most of it positive and most if it from translation agencies. Here are a few excerpts:

• ” If SDL keeps its promise, and continues to listen to customers and produce good products, which they have promised, the result could be a combination of 2 great ways of approaching TM.”
• ” It certainly doesn’t feel good to take your money to your competitor, but I wonder if buying from SDL can really harm us. … And what will the end result be? A withering Workbench and a blooming SDLX? A mix of both? Just SDLX? And if two distinct tools will continue to exist, it may be interesting to observe if SDL is using the same tool for their customers as they promote to others (us). I think for SDL it will be challenging to build and retain the image of a neutral business partner.”
• “As a Trados user, I have reservations about the support and future products from the new SDL. I hope that this is a step in the right direction in creating better tools and services for our industry. I will be interested to see how limited competition will affect the pricing.”
• ” We’ve been struggling with which company to purchase software from and now that won’t be an issue. Glad we had some patience.”

I’m still talking to buyers of translation services to get their reaction to the deal; so far the responses have ranged from neutral to positive. Most clients aren’t terribly concerned about who makes their software, just so long as standards are supported, price is held in line (or reduced), and usability continues to improve.

Finally, a number of readers said they thought the TRADOS purchase price of $60 million was too high. This price is roughly 2.5 times earnings. Compare that against a multiple of 1 that translation agencies generally command and this price may indeed seem high. But it’s also important to note that the past two years were hardly the best time to be hawking new enterprise software, which was precisely what TRADOS was trying to accomplish. This year, we’re seeing new optimism, increased spending, account consolidation, and a sense of urgency among companies seeking to expand globally; the timing may play nicely into SDL’s hands.

So now that SDL has announced its plans to buy TRADOS, the buzz around the industry is when Lionbridge is going to finally pull the trigger on purchasing its larger competitor Bowne Global Solutions (BGS). Based on what I’m hearing, the question isn’t “if” but “when.”

Last month, I asked Lionbridge CEO Rory Cowan what the main benefit of buying BGS would be and he answered “volume.” Now that Lionbridge has production centers up and running in India and a brand-new translation memory tool, it is ready to scale.

And the acquisition would put Lionbridge within arm’s reach of a half billion dollars in annual revenue, making it the gorilla in this industry (at least until an IBM Global Services decides to drop in).

But, regardless of what happens, the globalization services industry is really starting to get exciting again. Between the consolidation, innovation, and overall industry growth, this is a great time to be in the business of helping companies go global.

PS: I wrote about Lionbridge’s new translation memory service in the June issue of Global By Design

SDL International, the world’s third-largest translation/localization agency announced today its plans to acquire TRADOS, the maker of the world’s most popular machine translation software.

In the translation industry, this is very big news.

Every translation agency that uses TRADOS (which is most of them) and thousands of their clients that also use TRADOS will be affected by this deal.

And this is also a very big gamble for SDL. The company is betting that the “full service” solution of software and services is what clients want and need.

Meanwhile, Lionbridge is bettting on a different business model and it will be very interesting to see how this all plays out.

I had a brief chat with SDL on Friday about this deal and they are clearly very excited. SDL has been competing with TRADOS with a lower-priced software tool that was steadily gaining market share. In fact, SDL had been running a marketing campaign that basically urged companies to “switch” from TRADOS to SDL. Now, companies don’t need to switch.

The larger question will be if SDL can succeed where TRADOS has struggled: in selling enterprise content management software. SDL thinks it can, and I think they’ll do a good job, provided they get a handle on what large enterprises really want and need. The traditional business model of selling enterprise software is broken and in need of new ideas and pricing models. I look forward to seeing how SDL tackles the TRADOS GXT software.

Here is the press release