The Language Services Market: 2014

The Language Services Market: 2014 Annual Review of the Translation, Localization, and Interpreting Services Industry By Donald A. DePalma, Vijayalaxmi Hegde, Hélène Pielmeier, and Robert G. Stewart

The Language Services Market: 2014 By Donald A. DePalma, Vijayalaxmi Hegde, Hélène Pielmeier, and Robert G. Stewart Copyright 2014 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.

The Language Services Market: 2014 i Table of Contents Topic... 1 Market... 2 The Size and Shape of the Language Market in 2014... 2 Economic, Market, and Technology Forces Curb Big Growth... 2 North America and Europe as a Whole Continue to Grow... 5 A Global Pool of LSPs Services the Demand... 7 Suppliers... 10 Introductory Notes to the Lists in this Section... 10 Observations on the 100 Largest Global LSPs in 2014... 14 Conversions to U.S. Dollars Can Distort Performance... 16 The100 Biggest Suppliers in the World... 17 The Largest Suppliers in Nine Major Regions of the World... 22 Africa... 22 Asia... 23 Europe Eastern... 25 Europe Northern... 26 Europe Southern... 27 Europe Western... 28 Latin America and the Caribbean... 30 North America... 31 Oceania... 33 Services... 34 The Survey Yielded More Services Categories and Data Resolution... 34 The Revenue Composition of the Language Services Market... 34 The Written Word: Translation and Related Services... 37 The Spoken Word: Interpreting On Site and Remotely... 37 Localization and Engineering Services... 38 Supporting Services: Project Management and Desktop Publishing... 40 Translation Services for Media Applications... 40 Technology: Translation and Interpreting Automation... 41 Growth and Competition in Language Services and Technology... 42 The Same Four Services Grow the Fastest Year Over Year... 42 Some Services Are Heavily Populated with Competitors... 44 LSPs Offer More than Direct Language Services... 46 Benchmarks... 48 The Main Signs of Business Health... 48 How Clients Contribute to the Revenue Line... 52 Earnings by Client Show Differences by Company Size and Region... 52 The Top Three Clients Often Account for a Lot of Business... 53 How Project Management Relates to Revenue... 55 The Importance of Salespeople to Revenue Generation... 56 Most LSPs Have Very Few Salespeople... 57 Revenue Earned by Sales Reps Varies by Company Size and Region... 58 Measurement: Benchmarks Allow LSPs to Gauge Their Performance... 59 Methodology... 60 Copyright 2014 by Common Sense Advisory, Inc.

ii The Language Services Market: 2014 How We Conduct Our Global Market Survey... 60 When and How We Conducted the Survey... 61 Cleansing and Normalizing the Database... 61 How We Sized the Global Language Services Market... 62 Limitations of Our Efforts to Rank the Largest LSPs... 63 Data Validation and Accuracy for the Rankings... 63 Appendix... 65 About Common Sense Advisory... 80 Future Research... 80 Applied Research and Advisory Services... 80 Figures Figure 1: Language Services and Technology Market, 2009 to 2014... 3 Figure 2: Global Language Services Market Share by Region... 8 Figure 3: Most LSPs Have Two to Five Employees... 9 Figure 4: Currency Conversion Can Distort Reported Revenue... 16 Figure 5: The Distribution of Language Service and Technology Revenue in 2014... 35 Figure 6: Fastest-Growing Services and Technology from 2010 to 2014... 44 Figure 7: Gross Profit Margins Reported by LSPs, 2011 to 2013... 51 Tables Table 1: Language Services Share by Region, 2014 to 2017... 6 Table 2: The Distribution of LSPs in Each Region Continues to Fluctuate... 8 Table 3: Quick Access List of the Largest 100 (Short Form of Company Names)... 12 Table 4: Quick Access to the Regional Lists (Short Form of Company Names)... 13 Table 5: The 100 Largest LSPs in 2014... 22 Table 6: The Five Largest LSPs in Africa... 22 Table 7: The 30 Largest LSPs in Asia... 24 Table 8: The 20 Largest LSPs in Eastern Europe... 25 Table 9: The 25 Largest LSPs in Northern Europe... 26 Table 10: The 20 Largest LSPs in Southern Europe... 27 Table 11: The 35 Largest LSPs in Western Europe... 29 Table 12: The 15 Largest LSPs in Latin America and the Caribbean... 30 Table 13: The 40 Largest LSPs in North America... 32 Table 14: The Five Largest LSPs in Oceania... 33 Table 15: Language Services and Technology Market... 36 Table 16: Fastest-Growing Services from 2010 to 2014... 43 Table 17: Changes in Competitive Landscape from 2012 to 2014... 45 Table 18: Changes in Specialization by Service from 2012 to 2014... 46 Table 19: Other Services Offered by LSPs... 47 Table 20: Average Revenue by Company Size 2011 to 2013... 49 Table 21: Revenue per Employee by Company Size 2011 to 2013... 49 Table 22: Average Number of Clients by Company Size 2011 to 2013... 52 Table 23: Average Revenue per Client by Size of LSP from 2011 to 2013... 52 Copyright 2014 by Common Sense Advisory, Inc.

The Language Services Market: 2014 iii Table 24: Average Revenue per Client by Region 2011 to 2013... 53 Table 25: Percent of Revenue Generated by Top Three Clients 2011 to 2013... 54 Table 26: Number of Project Managers by Company Size 2011 to 2013... 55 Table 27: Average Revenue per Project Manager by Company Size 2011 to 2013... 55 Table 28: Average Revenue per Project Manager by Region 2011 to 2013... 56 Table 29: Number of Salespeople by Company Size 20ll to 2013... 57 Table 30: Number of Salespeople per LSP 2011 to 2013... 57 Table 31: Number of Salespeople per Region 2011 to 2013... 58 Table 32: Average Revenue per Salesperson by Company Size 2011 to 2013... 58 Table 33: Average Revenue per Salesperson by Region 2011 to 2013... 59 Table 34: Global LSPs (2013) Revenue in Local Currency... 69 Table 35: African LSPs (2013) Revenue in Local Currency... 69 Table 36: Asian LSPs (2013) Revenue in Local Currency... 70 Table 37: Eastern European LSPs (2013) Revenue in Local Currency... 71 Table 38: Northern European LSPs (2013) Revenue in Local Currency... 72 Table 39: Southern European LSPs (2013) Revenue in Local Currency... 73 Table 40: Western European LSPs (2013) Revenue in Local Currency... 75 Table 41: Latin America and Caribbean LSPs (2013) Revenue in Local Currency... 76 Table 42: North American LSPs (2013) Revenue in Local Currency... 78 Table 43: Oceanian LSPs (2013) Revenue in Local Currency... 79 Copyright 2014 by Common Sense Advisory, Inc.

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The Language Services Market: 2014 1 Topic Globalization is a fact of life for most industries. Success in global markets comes from adapting products and services to each country, culture, language, currency, and legal system. Translation, interpreting, localization, and other language-related services support these adaptations. For the 10th year, Common Sense Advisory conducted an annual study of the market for outsourced language services. This year we conducted a survey of 831 language service providers (LSPs). This report includes the following sections: Market an overview of the language services and technology market, revenue estimates, distribution of services, and forecasts for the sector. Suppliers a discussion and listing of the leading suppliers in the global and regional markets for language services and technology. Services an overview of the services and technologies in this sector, distribution of services, and revenue estimates for each category. Benchmarks a discussion of revenue, client, project management, and sales operations metrics for language service providers. Methodology a description of the process that Common Sense Advisory follows in producing this report. Appendix tables showing revenue in local currency for companies that appeared in both our 2013 and 2014 reports. Companies that have used past reports in their planning process will notice changes in how we categorize language services and qualify providers for our database. The new service segmentation reflects changes in the localization market. Finally, we also added an appendix showing revenue in local currencies for both 2012 and 2013. Copyright 2014 by Common Sense Advisory, Inc.

80 The Language Services Market: 2014 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 2014 by Common Sense Advisory, Inc.