The US Debt Ceiling crisis has created no shortage of drama over the last several months.  Whether in government or in business, one simply has to pay out less than what is taken in order to stay financially solvent.  Fortunately, Welocalize has not had this problem.  Our revenue in the first half of 2011 increased 44% over 2010, and our earnings continued to grow and remain healthy.  But like any other business or government, we have had to make tough choices.  There is never enough time or money to accomplish everything on the wish list.  The decision making challenge is in prioritization, and the goal should be an enduring structure with not only a stable ceiling but also a sound roof to keep out leaks.  This is the kind of business we are building here at Welocalize.

High growth creates great opportunities, but growth also creates structural challenges.  As an example, Ireland has endured through the perils of both.  After reaching an historical high of 5.47 percent GDP growth in March of 2007, Ireland fell to a record low of -4.47 percent in December of 2008. The cause of the decline, as we all know, was a systemic failure in the financial system, and not only in Ireland.  Debt knew no ceiling throughout the world; the growth was not built upon a scalable foundation and the roof caved in.

Learning from this example and others over the past 14 years, it has been my priority to make sure that Welocalize continues to grow upon a scalable and reliable foundation.  We have made significant investments to ensure this.  We have added over 100 staff in the past 12 months giving us a current total of 500 worldwide, and we will invest nearly $4 million this year in our technology products and infrastructure.  At the core of our growth will remain our 4-Pillars: Customer Service, Quality, Innovation and Teamwork.  We regularly ask our clients to measure us in our 4-Pillars, and we also use them to measure ourselves. 

Entering the second half of the year, I feel very fortunate and optimistic.  Economic challenges still persist around the world, but all signs are pointing to 2011 being a great year for Welocalize.  I want to thank our clients, staff and vendors.  Our industry is changing, and I plan on Welocalize being a leader in that change.  As President Herbert Hoover once said, “About the time we can make the ends meet, somebody moves the ends.” 

Smith

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The recent ranking by Common Sense Advisory (CSA) of the Top-50 Language Service Providers listed an incomplete total for Welocalize's 2010 revenue.  Although it was no fault of their own, CSA has been wonderfully supportive in helping us to correct the revenue total and agreed to issue a correction notice.  Our total 2010 revenue was US$59.61 million giving us a corrected ranking of #15 in the world in their report.  Here is the link to the correction notice on the CSA website, and I have also included it below.

Correction Notice: Welocalize

In May 2011, Common Sense Advisory published a ranking of the Top 50 language service providers (LSPs) in the world (see "The Language Services Market: 2011," May11). This report contained information about provider growth rates and revenue for both language services and technology.

Description of Corrections
After the report was published, Common Sense Advisory was made aware that the 2010 revenue listed for Welocalize corresponded only to language services revenue, and did not in fact include technology and associated services revenue.

Had the company’s technology and associated services revenue been included, Welocalize would have been listed as #15 in the Top 50 instead of #18, with total revenue from language services plus technology of US$59.61 million for 2010, a significant jump above the services revenue of US$44.71. Table 2, in which the Top 50 companies appear, is located on Page 20 of the report.

Given the company’s prior year’s revenue of US$50.30, the company grew at a rate of 18.50%. This growth rate was more than double the average market growth rate of 7.41% as measured from a sample of 912 language service providers worldwide. This growth rate also would have qualified Welocalize for inclusion on Table 3, which language service providers that outperformed the underlying market growth rate.

In addition, while Welocalize did not appear on our first ranking published in 2005, which was based on 2004 revenue, the company did appear in subsequent rankings starting in 2006, and has appeared every year since its first appearance. Therefore, the company qualified to be mentioned on Page 21, under the bullet titled, "Perennial Performers."

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The Multi-Screen Opportunity

What is the biggest driver of growth in our industry right now?  I believe it is what I refer to as the “multi-screen” opportunity.  Let me explain.  In the past, accessing many forms of content was cumbersome and slow.  Finding what you wanted in a printed manual took a long time.  Renting or buying a video required a trip to the store.  Accessing various forms of content required specialized devices, and connecting these devices was either challenging or nor possible.  These factors contributed to limits in growth and subsequently growth in the translation industry to support multilingual versions of that content and its underlying applications.

But this has all changed, and the change is accelerating.  The TV, the music player, the phone, the game console, these devices are all converging in exciting ways all over the world in nearly every language.  Content is now doubling on the internet every 18 months, and millions of new users are becoming connected every day.  Thus, the way they are accessing information is changing.

I can’t remember the last time when I referenced a hard copy version of content to answer a question.  Like many people, I just Google it.  And I Google it from any screen: my desktop, laptop, phone or TV – and even more so now, my iPad.  The convenience is great, and it is not just content; I am using more and more applications on a variety of screens.  What I am looking for in both content and applications is simple: a great user-experience supporting anything I want, on any device, on-demand, at any time of day and at any place in the world.  And I am not alone.  Look at video as an example.  I recently read that  25% of video is already viewed on mobile devices and internet-enabled televisions, and that number is growing rapidly.

This change as it relates to our industry is centered on two main themes: in a cluttered world with myriad choices, quality content is king, and people will pay for a better user experience on their devices.  Higher quality content and a stronger economic underpinning mean one thing to our industry – more words to translate!  The challenge is how?

Given the momentum in convergence across the information technology spectrum, our industry risks being left behind.  Our technologies must also begin to converge.  Our user experience must become simpler and on-demand.  The quality and speed of our services must progress through collaborative innovation.

There are a variety of innovation efforts being lead by our associations such as GALA and TAUS.  I recommend getting involved.  Change is afoot.  Greater adoption of standards and interoperability benefit all of us in the industry.  If we don’t innovate together, we risk missing an enormous opportunity for our industry as a whole.

Smith

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Many people have been asking me about our team in our Tokyo office, and I am happy to report that they are all safe.  Thank you so much for the well wishes.  Our people in Japan really appreciate the support.

We heard from Shinji, our Manager in Tokyo, throughout the weekend, and I have included our last update from Shinji below.

Our primary concern is the safety our colleagues, clients and their families.

Regarding our work: No data has been lost, but obviously the timing of some deliverables will be impacted. Everyone in our company will do their best to support our colleagues in Japan as they manage through the aftermath of this disaster.

The company has provided assistance through a donation to the Red Cross. If you feel you would also like to offer support please visit the Red Cross website or any other reputable support organization of your choice.

To our colleagues and clients in Japan, stay strong, be safe and our thoughts are with you.

Smith

Last update from Shinji:

There have been aftershocks almost every half hour since the big one hit us, and we expect this to go on for a while. We honestly don’t know what to expect, how safe it is to go back into the city area, or what. There is also a warning/forecast of another 7.0M aftershock (70% chance) predicted to happen, but when no one knows.

Because of all the devastation and nuclear reactor explosions, energy, gas, electricity, etc are nearly depleted. In order to help the situation of energy, surrounding regions will be having a schedule electricity outage to save and share this energy. Although the heart of Tokyo (also the heart of Japan basically) will not be affected by this power outage for obvious reasons (there would be literal chaos), there are still concerns of being able to use public transportation.

Therefore, some staff may not be able to make It to work, and some deliveries may be affected. We will do our best to work this out of course, but your patience and understanding is well appreciated. Although we are all ruthless at work, I know we all have hearts ;-)

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The Centre for Next Generation Localisation (CNGL) is a dynamic Academia-Industry partnership with over 100 researchers developing novel technologies addressing the key localization challenges of volume, access and personalization.


I am very excited to have Welocalize become an Industry Partner with the CNGL. It is an organization whose Mission is “to revolutionize localization via breakthroughs in automation, composition and integration”, and this is exactly in line with our goals at Welocalize. We are looking at ways to revolutionize the way localization services are performed and delivered across the translation supply chain.

Specifically, we will be working together with the CNGL on the interoperability challenge in the translation supply chain. Our goal is to create a working demonstration of standard data exchange across a content management system, connected to a translation management system, connected to a data cloud, a machine translation engine and a translators workbench.

The era of the walled garden is over. New, open ways of performing and delivering translation are emerging, and we plan to work closely with the CNGL to lead beneficial change for all.

Smith

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I was recently asked to be a Guest Blogger on the TAUS website. My post is on the topic of standards:


The Dark Side of Standards:  Why the lack thereof is significantly undermining both business prosperity and social progress around the world

Please click on the title above to have a look.

Smith ...

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We recently celebrated Thanksgiving here in America, and Welocalize surely has much to be thankful for this year.

• Riverside Partners has invested $34 million to support our expansion plans
• We now have an outstanding team located in the United Kingdom through our merger with Lloyd International Translations (LIT)
• Q3 marked another great quarter for Welocalize with sales increasing 32% through September over the same period in 2009
•  GlobalSight now powers translation matching for the 2.7 billion word TAUS TM super-cloud

Not only is the Riverside investment a great vote of confidence in Welocalize, it is a great vote of confidence in our industry. While many industries around the world are still struggling from the recession, we are fortunate to be in an industry that is growing at a double-digit rate! The credit for this great news goes to our staff, clients and translation partners all around the world.

The changes happening in our industry are equally exciting. The quality process is becoming more community oriented; there is a strong groundswell for openness and technology interoperability, and collaboration across competitors is growing in order to best serve client needs. On top of all of that, content on the internet is doubling every 18 months. Someone is going to have to translate the ever increasing volumes of this content – which means amazing opportunity for all of us!

I want to thank our clients, partners and staff for all that we have achieved this year, but we have even more great things to come!  My vision for the future is one where our products and services enable any content, on any device, in any language – at any time. The “always-on” world in which we live is requiring “on-demand translation” in order to keep up with the increased pace and volume of content demanded by end-users the world over. I believe our industry is still coming up short in creating an easy-to-use multilingual end-user experience, and we want to revolutionize the way translation is performed and delivered.  I see the revolution primarily being fought at two points in our supply chain which I call the first mile and the last mile.

The “first mile” revolution in our supply chain is at the point of connecting with translators.  We need to make it easier for translators to be an integrated, productive and profitable part of our supply chain.   I don’t think we will be able to keep pace with the changes in the world until we bridge this first mile gap in our supply chain. We need to make it easier and cheaper for translators to deliver quality work on time. Translators should be able to select an inexpensive or even free tool of their choice and have it easily connect to any other tool in the supply chain. Translators should be able to openly collaborate on a shared platform – even across competing multi-language vendors. We need to enable translators to be more efficient and more profitable. Otherwise, the number of high-quality translators in our supply chain will decline.

There is also a revolution happening in the last mile of our supply chain. I describe the last mile as the connection to actual end-users of the translated content.  The same lack of interoperability in the first mile of our supply chain limits our connectivity in the last mile to end-users. Community technologies are bringing buyers and sellers ever closer together in other industries and improving the user experience. However, in our industry, the traditional translation quality/review process rarely includes end-users. Instead, the process is limited to a closed loop of linguistic review by additional linguists. Yes, this step is necessary, but until we know the true value perception of end users it is hard to determine the appropriate budget for this step by language. This closed loop of translation QA is being perpetuated by what I call the SDL “walled garden.” Until we can create open and seamless connections at both ends of our supply chain through open APIs and standard data exchange protocols, we will not achieve the necessary interoperability to improve time, cost and quality.

I describe our current supply chain as a series of black boxes of service providers and tools that are disconnected from each other. I think our industry has reached a state of maturity where it is imperative to open and connect the boxes and create a better user experience for each constituency in the chain. The result will be time, cost and quality improvements, and all boats will rise on the changing industry tide.

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