Translation Services and Software in the Cloud

Translation Services and Software in the Cloud How LSPs Will Move to Cloud-Based Solutions By Donald A. DePalma and Benjamin B. Sargent

Translation in the Cloud By Donald A. DePalma and Benjamin B. Sargent Copyright 2013 by Common Sense Advisory, Inc., Cambridge, Massachusetts, United States of America. Published by: Common Sense Advisory, Inc. 100 Cambridgepark Drive Cambridge, MA 02140 USA +1.978.275.0500 info@commonsenseadvisory.com www.commonsenseadvisory.com No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the Publisher. Permission requests should be addressed to the Permissions Department, Common Sense Advisory, Inc., 100 Cambridgepark Drive, Cambridge, MA 02140, +1.978.275.0500, E-Mail: info@commonsenseadvisory.com. See www.commonsenseadvisory.com/en/citationpolicy.html for usage guidelines. Trademarks: Common Sense Advisory, Global Watchtower, Global DataSet, DataPoint, Globa Vista, Quick Take, and Technical Take are trademarks of Common Sense Advisory, Inc. All other trademarks are the property of their respective owners. Information is based on the best available resources at the time of analysis. Opinions reflect the best judgment of Common Sense Advisory s analysts at the time, and are subject to change.

Translation Services and Software in the Cloud i Table of Contents Topic... 1 Previous Research on Cloud-Based Translation... 1 Findings... 2 What Translation in the Cloud Means in This Report... 2 Survey Methodology and Demographics... 3 Many Respondents Have Tried Translation Services in the Cloud... 4 Submitting, Retrieving, or Reviewing Translation Jobs Online... 5 Dealing with Money: Bidding, Invoicing, and Paying... 5 Respondents Execute Tasks on Cloud-Based Software... 7 The Basics: Translating, Editing, and Proofreading (TEP)... 7 Management: Overseeing Projects and Enabling Collaboration... 8 Business Intelligence: Monitoring Projects and Analyzing Data... 9 Computer-Aided Translation Software Moves to the Cloud... 11 Respondents Compare Cloud-Based and Installed Solutions... 12 The Survey Showed Preferences for What Respondents Want in the Cloud... 14 What s Keeping People Away from Translation in the Cloud... 15 Summary: What Buyers and Their Suppliers Are Doing in the Cloud... 17 Analysis... 18 Should Language Service Providers Move to the Cloud?... 18 Overcoming Objections to the Cloud... 18 The Cloud Addresses Operational, Collaborative, and Location Pains... 19 Most LSPs Will See Economic Benefit in Cloud-Based Solutions... 20 LSPs Will Shift Production and Transaction Logging to the Cloud... 21 Providers Will Find Translation Tools Migrating to the Cloud... 21 LSPs Must Offer Easy Access and Self-Service in the Cloud... 24 Cloud-Based Software Adoption Will Vary by LSP Type... 26 It s Time to Get on Board... 29 Implications... 31 About Common Sense Advisory... 32 Future Research... 32 Applied Research and Advisory Services... 32 Figures Figure 1: Adoption of Job Submission, Retrieval, and Review in the Cloud... 6 Figure 2: Uptake of Bidding, Invoicing, and Payment in the Cloud... 7 Figure 3: Translating, Editing, and Proofing on the Cloud... 8 Figure 4: Movement of Administrative Functions onto the Cloud... 9 Figure 5: Progress of Monitoring and Business Intelligence... 10 Figure 6: Use of Online Translation Tools... 12 Figure 7: Experience Using Translation Tools in the Cloud... 13 Figure 8: Feature Preferences for Translation Tools in the Cloud... 15 Figure 9: Current Users Face Obstacles to Increased Usage... 16 Figure 10: Some Issues Have Kept Other Users Away from the Cloud... 16 Copyright 2013 by Common Sense Advisory, Inc.

ii Translation Services and Software in the Cloud Tables Table 1: Where LSPs Will See Benefits in the Cloud... 22 Table 2: How LSPs Approach Transactional Portals... 26 Table 3: How Different Types of LSPs Approach Technology... 28 Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 1 Topic Have you ever shared a spreadsheet in Google Docs? Played your music from icloud? Or used Salesforce or LinkedIn to manage relationships? Then you ve used the cloud. In various forms it has been part of our business and personal lives for the last decade. Not surprisingly, translation tools and services have found their way to the cloud. While everyone talks about the cloud, we wanted to find out what they mean by it and who is doing what. Common Sense Advisory conducted a survey with 257 buyers and suppliers of language technology and services about their experiences with translation offerings that were not installed on their own computers or networks. In this report we share what they told us. In our survey, we defined the cloud very broadly. We included all kinds of offpremise solutions, ranging from hosted systems to software-as-a-service to private and public clouds to web-based portals at language service providers. This definition follows the general use of the term that we have observed in the language services sector. Our survey discovered that many buyers and suppliers have used cloud-based technologies to buy, perform, review, or manage translation. However, we also found that most respondents were not convinced that these systems are ready for prime time. The report includes three sections: 1) Findings, in which we outline the results of the survey; 2) Analysis in which we discuss what those results mean to language service providers considering software solutions in the cloud; and 3) the Implications, where we highlight the impact of the cloud. Previous Research on Cloud-Based Translation Common Sense Advisory has long studied the cloud in its various forms as a deployment alternative. We explored the evolution of cloud-based software, defined its characteristics, and outlined growth pains (see The New Vortex around TMS in the Cloud, Feb10; Translation Technology in the Cloud, Jun10; and Cloudy with a Chance of TMS Outage, Dec09, respectively). We reviewed the cloud in our typology of LSP types (see Tech-Savvy Language Service Providers, Aug10). Copyright 2013 by Common Sense Advisory, Inc.

2 Translation Services and Software in the Cloud Findings This section defines translation in the cloud, describes the demographics of the respondents to our survey, and shares its results. What Translation in the Cloud Means in This Report The cloud embraces a wide range of internet-based technology, ranging from basic storage and computing services to specialized applications for managing customer relationships (Salesforce.com), human resources (Workday), or language services such as translation. As with other forms of cloud computing, translation in the cloud relies on the web and specialized servers managed by third parties. In this case, those external suppliers are globalization software vendors (GSVs) or language service providers (LSPs). Traditional desktop or other locally installed software and storage systems require you to be physically connected to a computer or a company network. Cloud-based resources, on the other hand, are located off premises but available whenever you have a connection to the internet. For this report, Common Sense Advisory distinguishes between purist and more common definitions of translation in the cloud: Purists have a narrow view of the cloud. They define the cloud as software and storage located on other network-connected computing or storage devices and accessed from browsers and other apps on computers, smartphones, tablets, and other devices. They may be sold on an as-needed and metered basis by the project, hour, or word volume. Some services may be available by subscription. Buyers can purchase as much or as little as they need, and require nothing more than a browser or specialized app on a computer, a tablet, a smartphone, or other device to access it. The more popular understanding includes a broader set of offerings. The language sector has long used the term cloud in reference to hosted, software-as-a-service (SaaS), private cloud, public cloud, and translation portals. Under this definition, every web-based or hosted solution qualifies. For many of the buyers and suppliers we speak with, they use cloud to refer to refer to any online, browser-accessible translation software or service. Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 3 For the purposes of our survey and analysis, we adopted this broader definition of the cloud that is, software or services delivered through a browser-based connection, smartphone, tablet, or other device to software and content located on the web. Whether it s merely hosted or born and bred in the cloud doesn t matter. Accordingly, we asked about: 1) translation that companies purchase and that LSPs offer through web-based interfaces; and 2) computer-aided translation (CAT) tools that end-buyers, LSPs, and freelancers use. We use the terms online and on the web as synonyms for this understanding of the cloud. Survey Methodology and Demographics We conducted our survey with 257 respondents from 49 countries in late May and early June 2012. We made the survey open to anyone involved in buying, selling, or delivering translation services. Respondents spanned the globe. North America accounted for 35.43% of the response, Europe for 48.82%, Asia for 8.27%, and Latin America and the Caribbean for 4.72%. Africa and Oceania made up the balance. This distribution aligns with what we find in our annual market survey (see The Language Services Market: 2012, May12). The majority work for language service providers. LSPs represented 60.17% of our sample, end buyers of translation 21.99%, and freelancers 17.84%. Throughout this section, we separately report the results for these three distinct stakeholder groups. The buy-side group included for-profit enterprises, government agencies, and non-governmental organizations. Most have worked with languages for more than three years. One-fourth (25.20%) of our respondents have worked in the translation or localization sector for four to 10 years. Another 29.13% have 10 to 15 years on the job. More than one-third (35.83%) have worked in the space for 16 to 31 or more years. Just 9.84% have been at it for three or fewer years. Many have multi-year experience with online translation. Nearly a quarter (24.66%) have experimented for a year or less, but the balance of those with cloud experience claim more usage. One-fifth (21.23%) told us they ve been using it for a year or two, another 19.18% two to three years, and 34.93% three or more years. The first survey question split our respondents into two groups, those who have experience with online translation services or tools and those who don t. Copyright 2013 by Common Sense Advisory, Inc.

4 Translation Services and Software in the Cloud We asked those who answered yes a series of questions about which tasks they ve performed in the cloud and what they plan to do. From there we proceeded to queries about their use of cloud technology. Anyone who answered no (32.54% of the respondents) was directed to a question about why they haven t used translation services or tools located other than in their company or on their own computers. Many Respondents Have Tried Translation Services in the Cloud Translation software and services have long been available on the web for free or for purchase. This fact explains the high rate of I have tried this responses when we asked respondents about online translation services. We asked about their experiences with four approaches to the cloud that we identified in past research about such translation activity: Many enterprise translation systems are hosted by third parties. Complexity, frequent updates, and server requirements have led many buyers to host their translation management systems (TMSes) with the vendors or third-party hosting facilities (see TMS Users Revealed, Feb12). Project managers, analysts, QA reviewers, and group managers take part in the workflow managed by these online systems. Free machine translation can be had nearly anywhere. Several suppliers offer no- or low-cost machine translation (MT) on the web and on mobile phones (see Trends in Machine Translation, Oct11). Many of our respondents have tried this ubiquitous, popular approach to overcoming the language barrier, both for personal and business use. Portals deliver human translation on demand. For a fee, a growing number of web-based LSP portals and start-ups have made it easier than ever to use your browser and credit card to get documents translated in as little as an hour (see Transactional Translation Reduces Friction in Sourcing, Apr10). Some rely exclusively on freelancers to do the work, while others employ project managers to oversee operations, sophisticated workflow, and CAT tools. This reliance on freelancers explains the fourth online option. Supplier sites integrate contractors with LSPs. Besides these broadly visible commercial solutions, many LSPs interact with contractors through password-protected vendor portals. These sites serve a variety of roles, allowing for communication, collaboration, and management between the LSP s project managers and the freelancers working with them. Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 5 Note: Our survey did not ask whether they have committed to the cloud. Instead, we sought to find out whether they had experimented with this platform, what their experience was like, and what might stand in the way of more use. Submitting, Retrieving, or Reviewing Translation Jobs Online We asked about the most basic tasks for someone buying translation or actually doing the work whether they had ever submitted, retrieved, or reviewed a job on the web (see Figure 1): Buyers mostly submitted and retrieved translations. Eighty percent of endpurchasers had submitted jobs on the web, while 76.00% of them retrieved one. The review task was less popular, with just 61.54% performing that task. LSPs and freelancers spend more time retrieving and reviewing. Among suppliers, 80.95% of LSPs and 84.00% of freelancers retrieved jobs submitted by buyers or as part of their workflow. Online review proved less popular, with just 62.20% of LSPs and 52.17% of sub-contractors having performed that task. Dealing with Money: Bidding, Invoicing, and Paying How and where money changes hands for online translation services depends on where you are in the supply chain. Our prior studies on this topic show three important functional areas when it comes to payment: Portals take credit cards. Commercial, fee-based portals offer the familiar allure of Amazon, Dell, and FedEx. Open 24 hours a day, seven days a week, these portals let buyers upload the files they want translated, specify the target languages, pay for it with a credit card or with one-click buying for registered users, and download the output. Intranet sites cross-charge internal budgets. Some larger companies with which we ve consulted have deployed similar portals on their intranets. These spend-management systems match internal demand with external suppliers (see Enterprise Language Processing, May10). Rather than pay with credit cards, they charge their departmental accounts. LSPs raise purchase orders and pay suppliers through vendor portals. These providers conduct their financial transactions with freelancers and subcontracting LSPs through these vendor portals. The participating suppliers use them to bid on, invoice, and track payments for their work. Copyright 2013 by Common Sense Advisory, Inc.

6 Translation Services and Software in the Cloud Figure 1: Adoption of Job Submission, Retrieval, and Review in the Cloud Source: Common Sense Advisory, Inc. In this survey, we asked about bidding, invoicing, and payment. Respondents were uneven in their use of online services for these functions (see Figure 2): LSPs lead the pack in trying business to do online. Fully 60.71% of LSPs have bid on projects online, and another 22.62% plan to. Many have tried invoicing; 62.35% have sent bills online. However, this could be a simple e- mail sent from an offline client application we didn t ask how they sent it. LSPs were less inclined to pay suppliers online, with less than half just 47.56% using the web to route payments, presumably through clearing houses such as ACH or SWIFT, wires, or payment gateways such as PayPal. Freelancers tend to be more conservative with business on the web. Fifty percent of the sole practitioners in our sample bid online for jobs, but fewer (45.83%) invoice on the web. Because they re usually the ones getting paid, fewer freelancers disburse funds. However, freelancers do outsource some of their work to others, perhaps explaining the 26.09% in the current survey who pay out money online. Buyers pay online, but not in overwhelming numbers. Just 33.33% of end clients pay online and only 8.33% expect to in the future. Most will likely continue to pay through their corporate accounts payable systems. Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 7 Figure 2: Uptake of Bidding, Invoicing, and Payment in the Cloud Source: Common Sense Advisory, Inc. Respondents Execute Tasks on Cloud-Based Software After asking about the buying and selling of services in the cloud, our survey switched gears and focused on tasks related to translation: 1) the basics of translating, editing, and proofing; 2) managing a project; and 3) monitoring projects and analyzing what s going on in the workflow. The Basics: Translating, Editing, and Proofreading (TEP) Rendering content from one language to another is the atomic function of language services. Making sure that the translated output is linguistically correct and accurate with respect to its purpose is the goal of the core quality assurance (QA) processes that follow beginning with editing and proofing. The majority of respondents in all three groups have tried translating, editing, and proofing in the cloud (see Figure 3): Freelancers have taken to the web. Fully 92% of sole practitioners told us that they have translated on the web, 83.33% have edited there, and 75.00% have proofed something online. This is no surprise freelancers tend to be early adopters of new technology and have long rejected the high cost of desktop CAT tools (see The State of Freelance Translation, Jun09). Copyright 2013 by Common Sense Advisory, Inc.

8 Translation Services and Software in the Cloud Figure 3: Translating, Editing, and Proofing on the Cloud Source: Common Sense Advisory, Inc. Furthermore, many sole practitioners find themselves using the translation platforms mandated by end-purchasers or LSPs. Increasingly, that technology is hosted on the web and is accessed by browsers, thus falling into our broad definition of the cloud. End clients and LSPs trail, but with plans to give it a try. Both these demand- and supply-side organizations have not moved as fast as the freelancers. They hover plus-or-minus two percent of 70% for translating, proofing, and editing. Those who have not yet done so are also roughly at the same level with respect to future plans for performing these activities online. Management: Overseeing Projects and Enabling Collaboration Most translation projects involve the orchestration of multiple participants inside and outside the company, elaborate workflows with QA checks and balances, integration with disparate systems of record and engagement, and linguistic assets. Those components rarely occur in the same location. That combination of complexity and distribution led respondents to try out operations running on servers other than their own. Not surprisingly, LSPs and corporate users have jumped on board, but freelancers tend to work on their own or for others, so these functions are not on their task lists (see Figure 4). Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 9 Figure 4: Movement of Administrative Functions onto the Cloud Source: Common Sense Advisory, Inc. The LSP business model requires them to manage operations online. The vast majority of these providers run as virtual entities, with most translators assembled from a worldwide database of freelancers (see Translation Future Shock, Apr12). That explains their 70-plus percent experience with managing, communicating, and assigning resources online. However, that drops to just 28.05% for resolving disputes, testament to the fact that a phone call or face-to-face visit is often required to deal with major project or personnel flare-ups. Buyers are moving toward more management in the cloud. While not as far along as LSPs, end clients are not far behind in trying out these functions online. Communication and resource allocation have passed the 50% mark. As with LSPs, conflict resolution tends to be more of an offline activity. Business Intelligence: Monitoring Projects and Analyzing Data A major benefit of using the worldwide web to orchestrate large-scale projects with many participants is the ability to instrument all interactions, the progress Copyright 2013 by Common Sense Advisory, Inc.

10 Translation Services and Software in the Cloud Figure 5: Progress of Monitoring and Business Intelligence Source: Common Sense Advisory, Inc. and completion of tasks, who s working on what, and metrics such as duration and productivity. With that data in hand, all participants can see what s happening in real time and use that knowledge to improve processes and practices. Many respondents reviewed project status online (see Figure 5): Insight into job status supports project management. Reviewing project status is a popular online oversight task among all of our respondents. That capability tends to be one of the first dashboard functions implemented in most workflow and translation management systems and in the commercial, intranet, and vendor portals built by both LSPs and corporate buyers (see TMS Users Revealed, Feb12). As with the administrative functions, LSPs lead the pack in having used these capabilities 78.24% have tried this function, leading both buyers (62.50%) and freelancers (60.87%). Newer-to-the-game analytics brings up the rear. Fewer than half of buyers (47.62%), LSPs (42.30%), and freelancers (27.78%) have tried this basic component of business intelligence (BI) in the cloud. One reason for this low showing is that analytics are less frequently implemented than other dashboard functions and not readily available as an add-on or third-party tool. It s no surprise that fewer freelancers have tried it they are more often the object of analysis than the originator of a BI query. Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 11 Computer-Aided Translation Software Moves to the Cloud After reviewing the tasks our respondents tried online, we asked about the software they used. Not surprisingly, we found a high rate of usage or experimentation with CAT tools and translation management (see Figure 6). Translation memory. The CAT tool with the longest tenure in the market, online translation memory (TM) has been tried by the majority of our respondents. Two-thirds of LSPs (66.15%), 63.64% of buyers, and 57.90% of freelancers have used it in the cloud. Translation memories in the cloud promise a degree of sharing and collaboration across long content supply chains involving buyers and translators scattered around the world. However, more than 40% of freelancers save TMs and terminology files on their local hard drive. This is mostly a question of speed freelancers to get lookup results when the TM is local, especially for very large TMs. Terminology management. LSPs have taken to online managing of terminology, with 64.52% trying it out. Buyers follow at 60.87%, with freelancers not far behind at 57.90%. We ve seen slow adoption of terminology management in the past, so this high showing of web-based experimentation augurs well for future adoption of this critical technology (see The Case for Terminology Management, Feb09). Machine translation. Freelancers led the charge to MT, with 60.87% having used it in the cloud. LSPs came in second at 43.37%, with buyers at just 32.00%. Freelance experience with MT underscored earlier research showing them to be ahead of the usage curve (see Translation Future Shock, Apr12). We suspect that most employ free web-based MT to validate or speed up their translations. Freelancers are more likely use free online MT, while LSPs and end clients gravitate toward paid solutions that they can integrate into their workflow. Workflow software. Many mature end-user organizations and tech-savvy LSPs have a workflow system in place, used to manage hand-offs from each participant in the supply chain to the next. Less advanced organizations may cobble together e-mail, FTP, and Dropbox into a workflow method. Twothirds of language service providers (68.33%) and more than half of buyers (55.67%) have used some form of workflow in the cloud. Translation management systems. This software incorporates workflow, but adds in management tools for linguistic assets, vendors, processes, and Copyright 2013 by Common Sense Advisory, Inc.

12 Translation Services and Software in the Cloud Figure 6: Use of Online Translation Tools Source: Common Sense Advisory, Inc. analytics (see How to Select a Translation Management System, Nov11). Large-scale TMS software is an area where buyers have the most need, a fact reflected in the 65.00% of them who have tried hosted or online TMS. LSPs are not far behind at 62.30%. Freelancers, forced by their enterprise clients and agency contracts to use them, are less involved, with just a third of them using the technology. Respondents Compare Cloud-Based and Installed Solutions We found that most respondents were satisfied with the tools they ve tried in the cloud. Then we asked how these solutions in the cloud compared to the software that they re accustomed to installing and using behind their firewalls. Our questions probed respondents on their level of agreement with a range of statements based on marketing claims made by vendors. We found the majority of all three groups disagreed with these claims (see Figure 7). Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 13 Figure 7: Experience Using Translation Tools in the Cloud Source: Common Sense Advisory, Inc. The cloud makes it easier to share data with colleagues wherever they happen to be. Less than half of buyers (48.39%) and LSPs (47.00%) agreed with this statement, while just 37.04% of freelancers felt sharing was easier. Collaboration is critical for buyers and LSPs managing projects in multiple locations around the planet, so few will move translation applications to the cloud if the cloud complicates rather than simplifies sharing. Copyright 2013 by Common Sense Advisory, Inc.

14 Translation Services and Software in the Cloud The cloud is less resource-intensive to administer than locally installed software. A bit more than a third of buyers (35.48%) and LSPs (34.00%) agreed with this contention, while just 22.22% of freelancers viewed the cloud as requiring fewer resources. On-premises software, whether installed on individual computers or servers, tends to consume large amounts of IT and administrative resources. While vendors claim that the cloud will require less care and feeding, most of our respondents remain unconvinced. The Survey Showed Preferences for What Respondents Want in the Cloud We asked our respondents about preferences for six features in cloud-based software (see Figure 8). Three of them supported the idea of uniting most or all functions in a single tool. Surprisingly, the vast majority of all three groups expressed preferences for a less unified solution: I prefer cloud software that includes all the tools necessary for translation. More than 70% of respondents in all three groups disagreed with this statement. While a single platform underpins translation management systems, most of our sample told us they weren t looking for such unity. I prefer cloud software that provides a single portal through which all translation functions are managed. Having all functions managed through a single interface was the preference of just 28.30% of buyers and 32.41% of LSPs. Most of our respondents do not seek a single interface through which workflow participants can access the full range of functions involved in translation from file preparation through quality assurance and reintegration with the content management system. I prefer cloud software that provides flexibility for different types of projects. Less than a third of our respondents would like to have the ability to manage a variety of jobs within a single system. This interest conflicts with the plans at larger organizations to systematically use the same tools and processes for all projects (see Accelerating Localization Maturity, Jan11). I prefer cloud software that won t lock me into a single solution for many years to come. Few buyers are comfortable with proprietary solutions that bind them to a supplier for life, but just 30.19% of our buy-side respondents and 26.21% of LSPs seem to feel that way. The majority of respondents apparently acquiesced to being bound to a vendor s technology. Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 15 Figure 8: Feature Preferences for Translation Tools in the Cloud Source: Common Sense Advisory, Inc. What s Keeping People Away from Translation in the Cloud To conclude the survey, we asked respondents who have used cloud-based tools which obstacles would delay wider adoption and those who haven t what has prevented their use to date. They could choose as many of the classic IT and business concerns as stood in their way (see Figures 9 and 10). Among respondents who have used the cloud, freelancers were the most concerned with information security that is, 44.44% named it as an issue, far exceeding the 12.90% of corporate users who worry about it. Similarly, many more freelancers (37.04%) told us they worry about performance and throughput than buyers (19.35%). Roughly a third of the LSPs in our sample expressed concern with information security, performance, and interoperability. Among those who have avoided the cloud, buyers and LSPs were most concerned with information security, performance, and interoperability. But in all cases, the majority of respondents seemed open to the use of the cloud. Copyright 2013 by Common Sense Advisory, Inc.

16 Translation Services and Software in the Cloud Figure 9: Current Users Face Obstacles to Increased Usage Source: Common Sense Advisory, Inc. Figure 10: Some Issues Have Kept Other Users Away from the Cloud Source: Common Sense Advisory, Inc. Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 17 Summary: What Buyers and Their Suppliers Are Doing in the Cloud From our survey of buyers, language service providers, and freelancers, we found that: Many have tried a variety of online translation services and tools. Excluding the nearly one-third of respondents who have stayed away from the cloud in all its manifestations, we did find a large percentage of each constituency that has experimented with hosted, SaaS, or web-based portals or technologies. Few have experienced the benefits claimed by suppliers. Most respondents told us that these cloud-based solutions did not match the collaboration, functionality, and performance of on-site or installed products. Traditional IT concerns keep some of them away. Those who have yet to try cloud-based solutions are turned off by concerns about information security, performance, and interoperability. Nonetheless, the majority did not point to any of the classic business or IT concerns as reasons for not moving to the cloud or embracing it more fully. In summary, we found that while most have tried cloud-based solutions, they don t yet see the benefits that their installed products give them. But most left the door open for future consideration of the cloud. Copyright 2013 by Common Sense Advisory, Inc.

18 Translation Services and Software in the Cloud Analysis The Findings show widespread experimentation, if not usage, of the cloud among all constituencies involved in the buying, selling, and production of translation. In this section, we outline the benefits that LSPs can expect from the cloud, the needs that it will satisfy, which tools they will use, and how to deal with client requirements. Should Language Service Providers Move to the Cloud? Common Sense Advisory s research has long shown interest among LSPs and buyers alike in translation services and software that appears as a black box provided in the internet cloud (see Localization Maturity Model, Aug06). The Findings for the current report demonstrate widespread experimentation with the cloud as both a client-facing translation portal and an internal production platform. However, while we did not observe a ringing endorsement of the benefits attributed to the cloud, we did see that the obstacles to expanded use are far from insurmountable. The big question is, Should LSPs move their commercial and production platforms to the cloud? Common Sense Advisory believes that most language service providers will see benefits from such a migration, but they must overcome objections and quantify the benefits. Overcoming Objections to the Cloud Most of our survey respondents have been working with translation for a long time. In fact, the average tenure of the buyers and LSPs is 13 years and 15 years for freelancers. Our sample skewed to the older, wiser crowd that s not seeing its first tectonic shift in technology. Furthermore, that much experience corresponds to an advanced level of localization maturity (see How to Choose Clients Based on Localization Maturity, Nov11). It s likely that most LSPs in our sample work at firms with substantial investment in translation technology that already delivers the benefits claimed by the cloud widespread data sharing, high performance, and flexible service levels, for example. They have tried various tools in the cloud and have found them wanting when compared to their current solutions. Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 19 Change is difficult, especially when you have systems that are doing the job and doing it better than newer, less functional alternatives. The reluctance to make the leap is understandable, but technology advances, practicality, and client needs will help many LSPs decide what to do: LSPs need to be convinced that the technology meets their needs. Cloud software vendors will have to address the perception that their products are better than what the LSPs currently use. They will have to deliver on the benefits in Figure 8. Flexibility, speed, and volume matter to most LSPs, so software vendor agendas need to tackle them first. Many LSPs will realize that the cloud is not an all-or-nothing proposition. Providers will move to cloud-based tools when it makes sense and they see benefit. Given their investment in other platforms, many will choose a hybrid solution that mixes onsite and online solutions. Few will achieve an all-inthe-cloud technology stack. Some clients will never move to the cloud. They cite continued anxiety about protecting intellectual property rights, guaranteeing specific levels of performance, and ensuring local system access where internet bandwidth is unavailable or limited. In some cases, their reluctance will be justified. LSPs that want to retain such clients will have to assuage their concerns either with service level agreements or with separate production models (see Translation Production Models, Nov12). The Cloud Addresses Operational, Collaborative, and Location Pains LSPs tend to move to cloud-based solutions to resolve three pain points: Round-the-clock operation. Cloud-based systems enable a 24/7 operation in two ways: 1) You no longer have to staff your IT department 168 hours a week; and 2) you can expect PMs to continue their work when they get home. Once you are running in the cloud, these team members can monitor their projects even when they are not in the office. Vendor collaboration. Providing freelancers and contracting LSPs with project material becomes easier with everyone plugged into the same cloud backbone. You can give direct access to style guides, glossaries, and TMs. This capability alleviates the possibility that PMs forget to send that material when they assign the jobs. Copyright 2013 by Common Sense Advisory, Inc.

20 Translation Services and Software in the Cloud Location. You can open an office in a new city and share existing systems without resorting to painfully slow VPN connections. The cloud also lets you expand the pool of candidates for positions by supporting remote workers plugged directly into your system. Many LSPs in non-large metropolitan areas have to rely on cloud-based solutions to grow their teams with qualified individuals. Most LSPs Will See Economic Benefit in Cloud-Based Solutions The cloud addresses three chronic issues faced by LSPs that rely on in-house CAT tools, workflow, or translation management systems (see Table 1): IT and data management overhead consumes too many resources. In-house software requires installation, maintenance, monitoring, and periodic updates. Assets such as translation memories and termbases are shipped to contractors, installed, uninstalled, and changes integrated when the project is done. Multiply that activity by the thousands of projects LSPs run every year (see Translation Future Shock, Apr12). How the cloud can help: Contrast that with a cloud-based solution that is installed on the web, available to your global supply chain, and always current. Linguistic assets are federated in the web, stored once, and instantly updated for all users. Worldwide collaboration strains project management. Equipping every freelancer, LSP, and buy-side participant on a project with the tools they need, plugging them into your communications backbone, and achieving global sharing and leverage of linguistic assets requires an enormous amount of work on access control lists and with software downloads. How the cloud can help: With the cloud, you can easily turn on that collaboration support. Everyone shares project assets over a browseraccessed, chat-ready, web services-enabled backbone that reaches around the globe. Working through a single dashboard, project managers can give all participants role-based or customized access to the project assets, communication, and production tools they need. The traditional language business relies on too much personal interaction. Many LSPs desire big clients and long-term relationships, while their customers are more interested in just getting translation done. The reliance on account managers, back-and-forth interactions, escalation paths, and other human touches slows down what should be an efficient set of Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 21 transformations. These points of friction combine with management overhead and the costs of distributed collaboration to slow delivery. How the cloud can help: When transferred to the cloud, workflow and transactions can happen in real time, with less human interaction, more insight into what s happening now, what happened in the past, and what s likely to happen in the future all with less effort and lower cost. In addition to these three issues, LSPs must adapt to the changing landscape. Buyers are moving even applications with sensitive data to the cloud, mainstream software vendors have changed their focus to cloud-based development, and translation tool developers have redirected their attention to the cloud. With buyer demand and technology supply shifting, LSPs will have little choice but to migrate some of their production platforms to the cloud and to offer buyers the ability to buy and manage translation online. However, the move to the cloud will not be a complete migration due to lingering issues such as limited internet access by its supply chain in some regions (see Figure 8 and The Need for Translation in Africa, May12). LSPs Will Shift Production and Transaction Logging to the Cloud LSPs use software to run their business operations, provide workflow for the translation process, and document interactions with their customers. Most of these activities will shift to cloud-based services and software. One important side benefit comes from transaction logging of all system events, especially handoffs to and from supply chain and client-side participants. Providers Will Find Translation Tools Migrating to the Cloud LSPs manage an extraordinarily complex process for hundreds of clients and thousands of projects. A survey earlier this year found that language service providers boast an average of 650 customers and work on an average of 3,023 projects annually (see Translation Future Shock, Apr12). These projects involve a changing array of in-house staff and freelancers, each of whom has to be kitted out with the tools, workflow, source content, reference materials, and linguistic assets to do each job. As they provision their worldwide supply chain, LSPs also manage storage for their clients original and translated content, workplaces, workflows, monitoring, and status reporting in many cases, they do so on a granular, sub-project basis with workflows involving other participants. Significantly, the human resources used at the task level within the workflow for each project keep changing, based on expertise required, availability, and Copyright 2013 by Common Sense Advisory, Inc.

22 Translation Services and Software in the Cloud IT Management Collaboration Business LSP Concern Potential Benefits to LSPs from Cloud-Based Solutions Infrastructure No need to install, maintain, and update IT infrastructure Translation environment outsourced to technology provider Applications run on browsers and standard web protocols Installation No locally installed software Maintenance and updates Single point of management and maintenance Updates only to web-resident server All access is to a single always-current version of the software Security Centralized in secure data center rather than in departments Encryption and secure HTTPS with web services Multi-platform Web-based user interfaces HTML, Flash, Flex, Silverlight, etc. Bring your own device near-universal support computer, smartphone, tablet, or future gadgets Scalability Elastic server capacity increases or decreases as needed System needs managed by dedicated provider Deployment Applications configured and deployed more quickly on web Quick addition of human resources and linguistic assets Support for small jobs, special configurations, and widely dispersed resources Global availability Access from anywhere No need to pre-provision users with software Collaboration Extensive collaboration on both a planned and ad hoc basis for multi-location, often international workflows. Information sharing Global leverage of linguistic assets such as translation memories, terminology databases, and style guides Standards Not a given, but cloud-based systems are more likely to take full advantage of web protocols and open standards All-in-one software Unified solution with all resources available to participants in a single interface Efficiency Shorter lag times worker and customer interactions go faster Friction in interactions with supply chain reduced Transactions and workflow actions happen in real time with little or no human intervention Pricing flexibility For clients: pay as you go metered usage and subscriptions Subscriptions level incoming revenue, making it less spikey Business intelligence All participants on a single platform simplify data collection and analysis Operating expense No need to invest in infrastructure means cost can be managed as an operating rather than a capital expense (OPEX vs. CAPEX) Monthly and per-use billing can be expensed as a variable cost rather than a fixed cost Technical support In-cloud support by software vendor decreases need for internal helpdesk and user support Table 1: Where LSPs Will See Benefits in the Cloud Source: Common Sense Advisory, Inc. Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 23 language and volume requirements. This always ready, always changing supply chain has both stable and fluctuating attributes particularly suited to a dynamic and distributed cloud-based work environment. It incorporates several types of translation tools that have already found their way into the cloud: Basic CAT tools can now be accessed from any browser. Software developers have been moving translation memories and terminology databases to centralized servers for years, where they are accessed by desktop tools. More recently, they ve positioned them in the cloud, where they can be used over standard web services by anyone with a desktop or browser client and the correct privileges. That also means anyone with a smartphone or tablet can gain access, thus inviting translation teams to the bring your own device (BYOD) party. Potential obstacles: The desktop CAT tool replacement market has just begun its transition, so not every product is cloud-capable. Besides that, some supply chain participants may not be able to use them due to low internet bandwidth in their countries so some language pairs will continue to require installed client software. For that reason, along with all the translation memories already sitting on desktops and in-house workgroup servers, make sure you buy tools with full TMX (Translation Memory exchange) and TBX (TermBase exchange) support to ensure interoperability between the old-school and cloud-based tools. Machine translation already resides mainly in the cloud. MT has long been available in hosted, SaaS, or born-in-the-cloud variants: at free websites such as Google, Microsoft, and freetranslations.com; from a dozen or more commercial developers including Asia Online, Lucy Software, SDL, and SYSTRAN; and through the extended Moses community such as Capita, KantanMT, PangeaMT, Precision Tools, and Safaba. Some suppliers also offer on-site installations, but mainly for government agencies or for buyers with security concerns. Some newer ones run exclusively in the cloud. Potential obstacles: To get the best output, you still have to shop different engines, meaning you re likely to use multiple MT products. That means employing different tools for each, because the commercial MT sector has yet to agree on standards and most Moses developers have stepped away from pure open-source for their product innovations (see Getting to the Promised Land of Machine Translation, Jan12). Cloud-based tools and best practices for post-editing MT (PEMT) are not widely available. MT, in the cloud or elsewhere, will require additional investment to firm up both the technology and the work methods. Copyright 2013 by Common Sense Advisory, Inc.

24 Translation Services and Software in the Cloud Translation management systems have long been hosted. This critical backbone supports a variety of functions, from back office to translation environment to reporting. Many of the original client/server TMS implementations are hosted, and their suppliers regularly position them as cloud products (see Translation Management Systems for LSPs, Nov11). Not all cloud-built TMSes encompass the entire spectrum of functions, but entrants in this category include Broca, Cloudwords, Dakwak, LSP.net, Smartling, Text United, Transifex, Wordbee, and XTM. Potential obstacles: LSPs currently using an on-premise TMS for heavy-duty workflow functions will be loath to swap it in favor of one of these newer systems. We do see LSPs using cloud-native applications for part of their production infrastructure for example, a centralized TM engine such as XTM Cloud. To get beyond client- or function-specific activities to where the entire production platform resides in the cloud will take time. We expect this will change when born-in-the-cloud LSPs become competitive threats. LSPs Must Offer Easy Access and Self-Service in the Cloud Organizations of all sizes have become accustomed to buying a wide array of goods online computers, office supplies, and even translation. Some of this corporate purchasing takes place through branded spend management portals provided by officially sanctioned suppliers, others through marketplaces like Amazon, but most through commercial websites. Small projects make up the majority of the language industry s revenue. Language service providers need to provide an online buying portal for firsttime and occasional buyers, distress or panic shoppers, and for procurement trials (see Ignore Small Translation Jobs at Your Own Risk, Jun12). Large, repeat buyers generate a profitable stream of projects. Translation groups, working with corporate procurement, want to be able to offer anyone quick turnaround at low cost. LSPs also need to support the needs of these more mature companies, some of which plan to integrate a third-party solution into their intranet portal for translation spend management (see From Managed to Optimized Localization Maturity, Feb11). LSPs have three options on how to deliver their clients a transactional portal (see Table 2): Build it themselves or have it built. The do-it-yourself approach yields the optimal solution for an LSP, but sometimes at a high cost. Custom-built DIY Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 25 projects have just a single user funding it (that is, the LSP that built it) and thus can t keep pace with technological advances without extraordinary outlays for continuous in-house or outsourced development. Given the track records of most LSPs in building their marketing websites, we think that most face major challenges in creating a compelling and usable portal experience (see Marketing Language Services Online, Feb10). Buy portal software and customize it. A new category of portal solutions has emerged from TMS vendors such as Broca, Kilgray, MemSource, Text United, Transifex, WordBee, and XTM. Some of these offer white-label portals that allow for LSP branding, customized within certain parameters, and integration with other in-house production modules. This approach allows the LSP to focus on its preferred model rather than on resource-consuming technology development. Join a marketplace or exchange. Cloud-based marketplaces aggregate buyer demand and bring it to a single point of commerce. Newer solutions such as Cloudwords and XTM Xchange provide LSPs with a strong incentive to participate in the form of that demand, but at the price of an auction environment and loss of control over the online channel. A self-contained ecosystem that provides selling, production, delivery, and accounting tools for LSPs changes the very nature of conducting business. We expect that many LSPs will sign up for at least one such marketplace, but hedge their bets with their own branded portals for existing customers and any new ones they can peel away from the open-market portals. Finding and vetting new resources is something that all buyers must do, and open marketplaces provide a potentially rich environment for those tasks. However, we don t see these new venues dominating the sales agendas of existing LSPs any time soon. Buyers seeking repeatable levels of quality, service, and leverage will choose either an auditable vendor or stick to a few known and trusted suppliers (see The Life Cycle of a Relationship with a Translation Provider, May12). The inherent benefits for translation buyers who consistently work with the same vendors include: 1) retained knowledge after getting a new vendor up to speed; 2) consistent known model that internal stakeholders trust; and 3) knowing whom to call when something is not right. Stable vendor relationships offer a compelling alternative to open exchanges or marketplaces that assume a different vendor can be selected each time. It may be that buyers will ask their trained and trusted vendors to move into a cloud-based exchange with them, but both buyers and sellers must ask whether the marketplace adds as much value as it extracts in fees. Copyright 2013 by Common Sense Advisory, Inc.

26 Translation Services and Software in the Cloud Portal Source Pros Cons Do-it-yourself TMS-derived Open marketplaces Total control over the environment Tight connection with clients Ability to manage relationship life cycle Third-party development amortized over many users Pre-vetted list of LSPs already up to speed on that platform Clients can adopt single platform but still outsource to multiple LSPs Commerce platform for translation improves efficiency and transparency of buying and selling Marketing work by marketplace supplier to aggregate demand Amortization of development over many LSPs Table 2: How LSPs Approach Transactional Portals Source: Common Sense Advisory, Inc. Cloud-Based Software Adoption Will Vary by LSP Type No sharing of development costs across multiple LSPs Buyer must limit to one LSP or else use multiple portals Custom-built portals eventually fall behind the innovation curve Need to customize a generalpurpose tool LSPs need to use multiple production platforms or limit themselves to users of one TMS Some loss of competitive differentiation Complete loss of competitive differentiation (vis-à-vis portals) LSPs need to market and sell in multiple ecosystems Rate focus may lead to dissatisfaction on both sides Eroded sense of trustworthiness Concern with shared memories, loss of intellectual property Despite their reliance on technology, many small to mid-sized language service providers tell us that the decision to use, select, install, manage, integrate, and sometimes replace CAT tools and TMS keeps them awake at night. Why? Their core competency is delivering translations, not building and maintaining software. Accordingly, we characterize the majority of LSPs as Off-the-Rack Operators who are not inclined to spend much money on tools or IT staff (see Tech-Savvy Language Service Providers, Aug10). How a language service provider approaches the cloud will depend on where it fits into our technology adoption matrix (see Table 3). Dream Machine Builders prefer homegrown technology. The goal of the Dream Machine Builder is ultimate efficiency in its own unified production environment. These providers perform all client work in their proprietary system. They invest in technology to create an ideal translation management platform, extending from the back office to the project management translation environment. Only a few LSPs fall into this category. Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 27 Dream Machine Builders in the cloud: These LSPs may offer cloud versions of their own software, but don t use much externally developed solutions of any type. We expect them to place some processing functions in the external cloud where elasticity is critical, but in general they will shy away from the public cloud. However, the next generation of born-in-the-cloud Dream Machine Builders may be more open to that option than the current crowd. Super Servicers pragmatically add whichever technology they need. Super Servicers typically invest heavily in automation and employ one or more fulltime developers or an engineering manager to coordinate ongoing outsourced development. They are open to incorporating commercial or open-source software, as long as it integrates with their existing systems. For the right customer, they may even start a second production line. Super Servicers in the cloud: We expect Super Servicers to take advantage of cloud infrastructure to support their businesses, but incrementally over time rather than as a deliberate migration strategy. Such LSPs tend to be cautious they evolve steadily and deliberately, but slowly. The focus for Super Servicers remains on internal efficiency. That model biases them toward internal infrastructure. Assiduous Assemblers lead the charge to new technology. This category of LSPs adopts new technology and ideas quickly. Because Assiduous Assemblers aim for efficiency on the customer s terms, they think nothing of working in multiple environments. They target clients with large or intricate requirements where specialization and customization give the most leverage. Assiduous Assemblers in the cloud: They are often the earliest adopters of any new technology and have probably been using the cloud in its broadest sense for over a decade. They also continue to use client/server software. They are not dogmatic about software, only about versatility. For these tinkerers, a software system is merely a tool to solve a customer problem they are most comfortable having as many tools as possible. They embrace cloud capabilities in the same way that is, they put more tools in the box. Smart Shoppers cautiously evaluate new software. While these LSPs realize that technology can help them grow their business, they know they have to be strategic that is, very careful about adopting new approaches. They don t have much of a budget for buying tools. More importantly, they don t have a big IT staff. It s a risky proposition to invest in new software. However, these LSPs want to grow. That forces them to select a first, second, or even third system that will help them acquire new customers. Copyright 2013 by Common Sense Advisory, Inc.

28 Translation Services and Software in the Cloud LSP Type and Attitude Dream Machine Builders: Perfect process built on a perfect machine Super Servicers: Will do anything, but only for the right kind of customer Assiduous Assemblers: See every client as unique and deserving of a custom solution Smart Shoppers: Use a range of tools but keep customization to a minimum Off-the-Rack Operators: Use limited tool set suited for a broad range of translation tasks Technology Model and Attitude toward Development Think and operate as software companies Cite latency as a reason for not using cloud-based components, but rarely use external modules anyway Deliver software to partners or clients via the cloud Internal development: >80%; only specialized, non-core applications acquired from outside sources Shy away from both OSS and cloud-based components Value dependability over price, simplicity, or convenience Have a strong development capability and willingness to use it, which means they can keep their customers happy Internal development: 50 to 80%; don t mind buying external components but will integrate them. Full-time coders on internal development team Buy many of their applications, often integrate, and sometimes build modules Buy and use multiple systems interchangeably Use their considerable knowledge and IT skills to create customerspecific offerings as they seek and offer infinite flexibility Internal development: 20-50%; these firms have capable staff that handle occasional coding projects but mostly spend time integrating, configuring, or customizing the many systems at play in a highly dynamic work environment Reserve their limited IT staff for integration, troubleshooting, and support of externally developed systems Choose tools carefully and prefer to avoid investing in duplicate systems, but in fact have and use multiple systems according to client demands Stress flexibility in their sales pitches, but they don t want to tinker too much Internal development: Up to 20%, rarely developing anything more than filters or scripts they have only a few techies on board Think that tools are just tools, supplied by a toolmaker Believe that the market will decide which tool is the flavor of the decade Don t want to change they ll have to re-train all their freelancers Internal development: None and probably no IT staff, either Table 3: How Different Types of LSPs Approach Technology Source: Common Sense Advisory, Inc. Smart Shoppers in the cloud: We expect these LSPs to adopt cloud-based software in a thoughtful, cautious way. They won t only adopt it because it s easier or less expensive. But if it will help them gain new customers, then the fact that it s easier to deploy will help them overcome the hesitation. As the translation buyers move into the cloud, Smart Shoppers will happily follow. Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 29 Off-the-Rack Operators think more about the job than the tools. The last thing an Off-the-Rack-Operator wants to worry about is software. These companies adopt a single platform from which they can serve the most customers. Or better yet, no platform at all. We ll do any job as long as we can use whatever tools happen to be lying about. An LSP at this level does not employ IT staff at least not for supporting translation technology. Off-the-Rack Operators in the cloud: Operators do inhabit the cloud. Older companies in this category may eschew anything new unless it s free. However, newly launched LSPs increasingly find they can set up shop in the cloud from day one. Off-the-Rack-Operators born in the cloud may grow to be large companies without ever installing or managing a single server. They love free stuff, but these suppliers will happily pay for software as long as they don t have to fuss about installing, managing, or training. It s Time to Get on Board Our research shows that most language service providers should find compelling benefits in cloud-based technology. Newly formed LSPs should find the easiest path to adoption. While previous generations of suppliers had to gain momentum before investing in technology, companies today can launch production and commerce in the cloud with minimal pain in choosing, installing, implementing, and training. It is also easier because they can base processes on available technology rather than force-fitting technology to existing processes. These born-in-the-cloud LSPs will create a new competitive threat that may force entrenched LSPs to speed their own shift to less costly, more agile work environments in the cloud. The speed of adoption will vary according to the typology of tech-savvy providers outlined in Table 3. In the future, work that happens offline that is, not in the cloud will be the exception for special circumstances, requiring extra steps for extracting and re-inserting content. The software development focus is already shifting to cloud-based offerings, following mainstream corporate trends. This continues the adoption curve we saw with client/server, displacing widely distributed systems, as more functions found their way back to centralized servers accessed from lightweight clients. In many ways, this shift is unstoppable. As your customers migrate to the cloud and become accustomed to services and products being delivered via this channel, you ll have to get on board. You ll also have to develop marketing messages that tell a compelling story about how your company uses the latest cloud technology to improve quality, speed up production, and reduce costs for your clients. Copyright 2013 by Common Sense Advisory, Inc.

30 Translation Services and Software in the Cloud Copyright 2013 by Common Sense Advisory, Inc.

Translation Services and Software in the Cloud 31 Implications Two years ago, we found that most technology-aware LSPs already accepted the notion that their future lies in the cloud. They reported a great willingness to use externally hosted software, but few had actually deployed it. Our current survey shows that the situation has changed. Across our entire sample, we saw widespread experience with most tasks in the translation workflow. Even those respondents who said they were holding back on the cloud did so for reasons that could be proven or disproven with empirical data security, performance, and interoperability. Over time, these impediments for both buyers and LSPs will disappear. There are certain inherent benefits for companies that can leap with both feet into the cloud. However, LSPs with legacy systems may hesitate to give up the workhorse applications on which they ve built their businesses and replace them with younger, less feature-rich systems. Another factor is employee training and entrenched process expectations. Most LSPs we talk to are convinced that their production model, above all other LSP models, uniquely provides the best balance of quality, time, and price. These beliefs put the brakes on adopting a new system. Moving production workflows and customer service activities into the cloud means retooling a proven process and re-training an expert workforce. Cloud migration requires planning, time, investment, and some risk. However, there is a risk in waiting too long. New LSPs founded in today s Cloud Era may adopt these technologies from the day they file their incorporation papers. When they do, they build a higher order of efficiency into their business DNA. The workflows and customer interactions happen faster, with less effort and lower cost to get a similar result. In an age of transparency and accountability, systematic transaction logging across the entire supply chain means that unified, cloud-based systems inherently produce reporting data that is more comprehensive without the need to merge or scrub it. These new born-in-the-cloud language service providers pose a competitive nuisance to more established LSPs, both large and small. Eventually, the cloudbased suppliers will force the existing LSPs to innovate and adopt newer, more efficient models. The only question is how quickly today s leading LSPs will react, and whether the cloud-babies will eat up market share before the entrenched leaders catch up and match their new rivals for speed and agility. Copyright 2013 by Common Sense Advisory, Inc.

32 Translation Services and Software in the Cloud About Common Sense Advisory Common Sense Advisory, Inc. is an independent research firm committed to objective research and analysis of the business practices, services, and technology for translation, localization, and interpreting. With its research for both Global Leaders and Industry Providers, Common Sense Advisory endeavors to improve the quality and practice of international business, and the efficiency of the online and offline operations that support it. To find out more about our research and how to become a member: E-mail us info@commonsenseadvisory.com. Visit www.commonsenseadvisory.com. Call +1.978.275.0500. Future Research Common Sense Advisory seeks interviewees from the community of people involved in building business applications for international use. If you would like to be interviewed or have clients who would like to share their experiences, please e-mail us at info@commonsenseadvisory.com. We anonymize participants and hold all information in the strictest confidence. Applied Research and Advisory Services This report and other Common Sense Advisory research into the best practices of business globalization serve as the foundation for our Applied Research and Advisory Services including International Customer Experience Assessments, Vendor Selection, Localization Business Process Audits, Globalization Excellence and Optimization Assessments, and Globalization Roadmaps. E-mail us at info@commonsenseadvisory.com for more information. Copyright 2013 by Common Sense Advisory, Inc.