Other experts like Kirti Vashee and my former colleagues from Common Sense Advisory will certainly post more detailed analyses of this news, but I wanted to document my initial reactions to what was announced today by SDL and LanguageWeaver, the first developer of a commercial Statistical Machine Translation software system.
In recent months, I have been thanking SDL for the great job that they are doing at alienating their technology customers by providing sub-par customer service and support. Clients contact us at Milengo looking for alternative solutions, which we are happy to recommend. SDL has been very successful at irritating translators, LSPs, and final buyers with their technology approach.
LanguageWeaver, a pioneer in SMT for commercial purposes, has struggled to sell a product profitably, when it has to compete with free solutions like Google Translate and MOSES. It’s main client is the U.S. government and the main language pair is Arabic-English. In fact, the announcement points out that in 2009, the company had a loss of $1 million for revenues of $12.2 million.
So why is SDL paying $42.5 million (or 3.5 times revenue) for a company that loses money?
I believe that — whether it works or not, and whether it is deployed or not — acquiring a software company is something that investors at the London Stock Exchange put a very high value on. This is a good story that will boost SDL’s stock, just as the IBM Websphere MT deal boosted Lionbridge’s stock to the level that it is today (from one dollar to $5.28). This is a good story that helps SDL to further position itself as a software company instead of a service company.
The second benefit for SDL, is opening a door to U.S. government R&D funds through DARPA. LanguageWeaver has advanced mostly because of the availability of such funds.
I don’t see the technology itself as a major game changer for SDL. SDL had already acquired Transparent Language, a Rules-based Machine Translation developer, and not much has been heard about that technology since. After a little time, LanguageWeaver might take the same route as Idiom’s Worldserver, which was growing fast and was virtually discontinued by SDL.
If the patterns of previous acquisitions prevail, SDL will get very excited about LanguageWeaver, but after the excitement wears off, the product will be abandoned to its own fate. So LanguageWeaver clients who already work with Trados, TMS, and other SDL products already know the level of service to expect, and should maybe run for the hills when they come offering LanguageWeaver solutions.
Finally, for competitors — unless SDL gets its act together — they have nothing to fear. Just keep providing excellent customer service. That’s what Milengo does.
Renato Beninatto, CEO & Chief Instigator at Milengo
Tags: language service providers, machine translation software, sdl, smt, statistical machine translation
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