1. Copyright © 2006 by Common Sense Advisory, Inc. All rights reserved. Insight for global market leaders A Review of the Global Translation Market Place Renato Beninatto COO and VP of Consulting Common Sense Advisory, Inc.

2. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. Bona fides 20 years making mistakes in the translation business Last 4 years spent gathering information I wish I had and sharing it with people who don’t want to pay for it Over 1000 pages of published data about the translation industry Lots of unpublished data Absolute independence… to the point of losing money because of it

3. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. Agenda Market today Trends What doesn’t matter? Branding and quality What clients really want

4. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. Market Data 87% of translation buyers outsource most or all of its jobs ≈ 5,000 companies with more than 5 employees –42% U.S. –41% Europe –12% Asia – 5% R.O.W. Outsourceable translation market in 2006 will reach USD 9.6 billion We estimate market growth at 7.5% p.a.

5. RankCompanyHQ CountryRevenue in US$M EmployeesOfficesStatus 1Lionbridge TechnologiesUS 405.0400050Public 2L-3US 372.3n/a Public 3SDL InternationalUK 142.9150050Public 4TransPerfect/TranslationsUS 74.038530Private 5RWS GroupUK 66.43328Public 6SDI Media GroupUS 65.020023Private 7Xerox Global ServicesUK 60.02004Public 8Euroscript s.a.r.l.LU 59.258010Private 9STAR AGCH 52.079035Private 10CLS CommunicationCH 38.628014Private 11Logos GroupIT 36.512017Private 12LCJ EEIGDE/IT/BE/ES 26.51598Private 13MoraviaCZ 25.23819Private 14Merrill Brink InternationalUS 24.51404Private 15McNeil MultilingualUS 24.32005Private 16Hewlett-Packard ACGFR 21.7656Public 17ThebigwordUK 21.01087Private 18WelocalizeUS 20.51045Private 19SkrivanekCZ18.535050Private 20VistaTECIE 15.61235Private TOP 20 TRANSLATION COMPANIES

6. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. Which sectors are buying language services? Technology and medical top list

7. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. A couple of trends

8. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. 1 – Mid-market heats up Major acquisitions: Lionbridge, SDL, L-3 Minor but important acquisitions in 2005 and early 2006: –Merrill of Brink –RWS of Eclipse –VistaTEC management buy-out –TransPerfect of Crimson, Epik and Architext –Transware of Global Sight –Welocalize of Connect Global and Transco –SDI Media of Studio –Coto of LingoSystems

9. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. Localization as a managed service (LaMS) Technology is “free” Technology rules Service becomes cheaper with technology 2 – New Technologies and New Service Models Hybrid solutions – thebigword and Transware Focus on workflow Other hosted solutions - Lingotek

10. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. ¿Donde están la calidad y el branding?

11. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. Quality: Translator certification important to 80% of LSPs

12. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. Quality: Most LSPs have not sought ISO certification

13. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. Branding –There is no brand if there is no brand awareness –Recent survey: 100 respondents – all buyers 289 companies mentioned Top 3: Lionbridge, SDL, and Moravia –Translation has not had the Keynesian roll-up –Professional services tend to be balkanized Big accounting houses vs. many small ones Advertising

14. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. In the time it takes for a typical student to graduate from college… Who’s Who in Localization Services? 1.Berlitz 2.Bowne 3.L&H 4.Lionbridge 5.ALPNET 2005 1.Lionbridge 2.L-3 3.SDL 4.TransPerfect 5.RWS 2010

15. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. What do clients really want? Price Displaces Quality as the Main Criterion for Vendor Selection Question: ”How do you choose your vendors/suppliers?” [multiple answers] Source: How to Avoid Getting Lost in Translation, Common Sense Advisory, Inc

16. C O M M O N S E N S E A D V I S O R Y, I N C. Copyright © 2006 by Common Sense Advisory, Inc. Thank you. Renato Beninatto renato@commonsenseadvisory.com +1.978.275.0500 Don’t miss Localization Maturity Model TMS Report Global Watchtower Insight for global market leaders