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The T 50 Language Service Providers op

by Nataly Kelly and Robert G. Stewart
In this brief, we present the worlds leading providers of translation, localization, and interpreting services. We also size the market based on reported revenue data, and present our projections for the next five years. Due in part to the growth of the industry, we expanded this years ranking to include the 50 largest providers of language services and technology (see Table 1).
Company 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Mission Essential Personnel HP ACG Global Linguist Solutions Lionbridge Technologies TransPerfect/Translations.com SDL L-3 Linguist Operations & Technical Support STAR Group euroscript International S.A. ManpowerGroup RWS Holdings PLC Yamagata Intech Corporation CLS Communication thebigword Group Honyaku Center Inc. Logos Group Semantix AB Welocalize, Inc. Moravia Worldwide hiSoft Technology International Ltd. HQ Country US FR US US US UK US CH LU US UK JP CH UK JP IT SE US CZ ZH 2010 Revenue in US$M 588.00 460.00 435.00 405.20 252.44 245.09 167.00 145.00 124.13 101.00 96.92 68.45 67.78 60.55 56.36 51.50 48.51 44.71 42.70 38.50 Employees 7494 4200 339 4500 1268 1800 1016 850 1350 324 503 800 550 380 225 170 202 442 458 930 Offices 20 15 9 40 66 60 1 43 16 11 12 13 19 9 8 10 10 10 10 16 Status Private Public Private Public Private Public Public Private Private Public Public Private Private Private Public Private Private Private Private Public

Copyright 2011 by Common Sense Advisory, Inc. Unauthorized Reproduction & Distribution Prohibited

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The Top 50 Language Service Providers

Company 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 43 44 45 46 47 48 49 50 Cyracom International, Inc. Invizion Sprkservice Sverige AB Crestec, Inc. AAC Global Merrill Brink International Pacific Interpreters ONCALL Interpreters & Translators Language Services Associates CBG Konsult AB Skrivanek Group CSOFT International Jonckers Translation & Engineering s.a. Ishida Taiseisha Inc. PTSGI Telelingua Alpha CRC Concorde Group SeproTec Multilingual Solutions LanguageWire Verztec Consulting PTE Ltd. Sajan Amesto Translations Transvoice Sweden AB TRANSN Co., Ltd. TOIN Corporation Chizai Corporation TextMinded, EEIG Xplanation Language Services NV

HQ Country US US SE JP FI US US AU US SE CZ ZH BE JP TW BE UK NL ES DK SG US NO SE ZH JP JP BE BE

2010 Revenue in US$M 37.40 33.00 32.30 30.88 30.54 30.02 30.00 28.39 27.00 25.04 24.80 24.80 24.17 24.10 22.28 21.75 21.65 21.25 20.06 19.11 16.75 16.00 15.59 15.31 14.76 14.04 13.77 13.41 12.55

Employees 442 290 40 360 238 100 245 85 153 190 320 260 150 1650 300 200 265 75 404 75 136 124 75 65 360 100 75 78 67

Offices 4 1 2 15 14 10 5 5 5 9 44 14 9 27 4 6 12 2 16 7 7 5 4 3 6 4 3 7 5

Status Private Private Private Private Public Private Private Private Private Private Private Private Private Private Private Private Private Private Private Private Private Public Private Private Private Private Private Private Private

Table 1: The Top 50 Global Language Service Providers in 2011 Source: Common Sense Advisory, Inc.

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The Top 50 Language Service Providers

In total, these firms took in more than US$4 billion in revenue in 2010. Five companies in the industry Mission Essential Personnel, HP ACG, Global Linguist Solutions, Lionbridge, and TransPerfect/Translations.com earned revenue that added up to more than US$2 billion. This years list of top earners includes a mixture of companies that focus on commercial and government work. Two of the top five companies Mission Essential Personnel and Global Linguist Solutions earn most of their revenue from contracts with the U.S. government, especially defense and intelligence organizations. And, due to a change in fiscal year, the revenue for GLS represents only nine months instead of a full calendar year. L-3 Communications, which has appeared near the top of our previous lists, also specializes in government work. While not a government-centric provider, Lionbridge also derives a portion of its revenue from government work. On the commercial side, HP ACG, Lionbridge, TransPerfect/Translations.com, and SDL lead the pack, followed closely by STAR Group and euroscript International. Its important to note that the revenue from SDL reflects only its language services and technology not its revenue from e-commerce and content management. The remainder of the 15 largest companies are primarily focused on commercial opportunities, with companies like Manpower, RWS, Yamagata, CLS, thebigword, and Honyaku Center leading the pack.

Ongoing Leaders, New Entries, and Noteworthy Absences

Our ranking includes many companies that appear time and time again. However, our list also changes slightly to reflect companies that come out of hiding for the first time. Less commonly, some companies drop off the ranking after appearing in previous years. Here is a rundown of the companies and their experience (or lack thereof) with our previous rankings: Perennial performers. There are 30 companies in our Top 50 ranking that appeared on last years list of the 35 largest companies. In fact, many of these companies have appeared in most or all of the six rankings weve published since 2005, such as CLS, euroscript, HP ACG, Jonckers, L-3, Lionbridge, Logos Group, Merrill Brink, Moravia, RWS, SDL, STAR, thebigword, TOIN, and TransPerfect. Notably absent. Five firms that appeared in last years ranking did not appear in this years list. Language Line Services, which held the #4 spot in our 2010 ranking with revenues of nearly US$300 million, was unable to participate this year. McNeil Technologies, which was #2 in 2010, was acquired by AECOM in 2010.
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The Top 50 Language Service Providers

Along with Dyncorp, AECOM is one of the companies behind Global Linguist Solutions (#3 in our 2011 ranking). Three other companies SOS International, Kern, and VistaTEC sat out for reasons not disclosed. Reappearing after a brief hiatus. This years ranking includes some companies that are back and bigger than ever. One of the most talked-about companies will no doubt be STAR Group, which appears in the #8 spot with US$145 million in annual revenue. Japan-based Yamagata also leaped back onto the list with US$68 million this year. Fellow Japanese company TOIN returned with US$14 million. Newcomers to our lists. The 2011 list includes seven companies that had never appeared in any of our rankings previously. U.S.-based Invizion appears in the top half of the ranking, with revenues of US$33 million. Also debuting in a rather high position is the first-ever Australian LSP to make the list, ONCALL, with US$28 million. Two other companies with revenues in excess of US$20 million also appeared on our list for the first time this year U.K.-based Alpha CRC and Concorde Group, based in the Netherlands. Other new entries include Swedish telephone interpreting provider Transvoice with revenues of US$15 million and Belgian provider TextMinded with US$13 million. Regional players that made the global jump. Seven other companies on the list had previously appeared in our regional rankings. These included companies from Northern Europe, such as Danish firm LanguageWire and Norwegian provider Amesto; and companies in Asia, like Singapore-based Verztec Consulting, Chinese player TRANSN, and Japanese company Chizai. Sajan moved from our North American ranking to the global ranking this year, as did Xplanation from the previous years Western European list.

Why We Expanded the List to Include 50 Global Market Leaders

Last year, our list of the Top 35 LSPs bottomed out at around US$20 million in annual revenue. This year, had we kept a similar revenue number, we would have published a list of the Top 40 companies. However, we decided to publish the Top 50 companies instead, for three main reasons: A longer list is more reflective of the true market dynamics. The language services industry has very few large companies the vast majority of these earn less than US$1 million in annual revenue per year. So, the deeper we go with our list, the more accurately we believe it reflects the market at large. After all, the Top 50 companies represent less than a fifth of 1% of the suppliers in the market.

Copyright 2011 by Common Sense Advisory, Inc. Unauthorized Reproduction & Distribution Prohibited

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The Top 50 Language Service Providers

A longer list gives smaller firms a chance to shine. Last year, we expanded our rankings to include eight regional rankings in addition to our global one, in an effort to provide greater transparency around the local market leaders in each region of the world. This effort was successful in bringing many smaller companies out of the woodwork. Many buyers told us they found out about new potential providers because of their inclusion on our lists. Many LSPs found partners and suppliers for re-selling thanks to these region-specific rankings. A longer list brings more companies out of hiding. Each time we publish the ranking, other companies come forward and want to participate the following year. We believe that transparency is a very good thing for the industry. It enables companies to objectively compare and benchmark key performance indicators.

In essence, when it comes to market information in general and supplier rankings specifically, more is more. We believe it empowers companies to make smarter decisions and better understand their own positions in the LSP universe. Each year since its inception, weve expanded the scope of our exercise, so a longer list in 2011 is a natural part of that evolution.

How We Identified the Largest Industry Providers

We issued a call for participation far and wide across numerous channels. We also flagged more than 200 companies that past research indicated might qualify to be on our rankings. This list included the firms that were in our previous years rankings as well as companies listed in other sources. We carried out additional recruitment activities to actively encourage these prospective top-earning LSPs to participate in our survey, including e-mail invitations, phone calls, and a variety of other web-based communications, including social media. Common Sense Advisorys rankings of suppliers include the largest translation and interpreting companies that have voluntarily agreed to participate in our study. Additional companies may be large enough to qualify, but may not have participated in our study for any number of reasons. Aside from directly approaching the LSPs we believed to be the largest, we captured many others by analyzing their survey data. This enabled us to identify not only the biggest global firms but the largest in each major region of the world. In other words, the two major prongs of recruitment we employed were the general activities used to generate traffic for the market sizing survey and specialized outreach to the companies we suspected to be the largest.
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The Top 50 Language Service Providers

How Big is the Language Services Market in 2011?

This year, we compiled a database of 25,256 LSPs in 152 countries. We also analyzed detailed data from 912 LSPs, as collected through a survey, to reveal more specific information about the market itself, including its regional breakdowns. Common Sense Advisory calculates that the market for outsourced language services is worth US$31.438 billion in 2011. Our search led us to identify translation and interpreting providers in many places, including some that are not the usual suspects for producing LSPs, such as Swaziland, Tajikstan, and Yemen. However, the largest numbers of firms were found where one would expect to find them Europe, North America, and Asia. Our study measures actual financial activity for fiscal year 2010. We found that the vast majority of the market is concentrated in two major geographic regions of the world Europe and North America. To provide greater visibility into the market, we divide Europe into four main regions, to present a total of nine major regions that make up the largest shares of total market size (see Figure 1). To come up with the most appropriate and universally accepted regional groupings, we followed the classifications developed by the United Nations. North America (49.25%) and Western Europe (21.13%) make up the largest segments of the market, followed by Northern Europe (12.71%). A middle tier of regions includes Asia (7.43%), Southern Europe (5.39%), and Eastern Europe (2.84%). The smallest tier of regions consists of Oceania (0.66%), Latin America (0.32%), and Africa (0.26%). Can the market really be that big? As our section on suppliers will show, the Top 50 suppliers revenue adds up to more than US$4 billion alone. The remainder of companies we surveyed contributed nearly another US$1 billion. While its definitely true that our survey reflects mostly top-earning companies, we surveyed 912 companies out of a total LSP population of 25,256. In other words, our survey sample represents 3.6% of the total population, which contributed a total of US$5 billion to the market in 2010. Our revised estimate for the 2010 market is US$29.268 billion. So, our sample of just 3.6% of language service providers worldwide accounted for 17% of global revenue in 2010. The remaining 24,344 LSPs in our directory contribute much tinier amounts, but there are so many of them that they make up a significant market and one thats highly fragmented.

Copyright 2011 by Common Sense Advisory, Inc. Unauthorized Reproduction & Distribution Prohibited

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The Top 50 Language Service Providers

Figure 1: Global Language Services Market Share by Region Source: Common Sense Advisory, Inc.

The Market Keeps Growing, but Not as Fast as Previously Thought

According to the year-to-year changes in revenue and the expected earnings reported by the LSPs we surveyed, the language services market is growing at an annual rate of 7.41%. Over the coming five years, we expect the market to reach US$38.96 billion (see Table 2). As of 2011, Common Sense Advisory calculates that the language services market is growing at an annual rate of 7.41%.

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The Top 50 Language Service Providers

Region North America Western Europe Northern Europe Asia Southern Europe Eastern Europe Oceania Latin America Africa Growth Totals

Market Share 49.25% 21.13% 12.71% 7.43% 5.39% 2.84% 0.66% 0.32% 0.26% 100.00%

2010 US$ M 14,415 6,186 3,720 2,175 1,577 832 192 95 77 29,268

2011 US$ M 15,483 6,644 3,995 2,336 1,694 894 207 102 83 31,438

2012 US$ M 16,631 7,137 4,292 2,509 1,820 960 222 110 89 33,768

2013 US$ M 17,864 7,666 4,610 2,695 1,955 1,031 238 118 96 36,271

2014 US$ M 19,188 8,234 4,951 2,895 2,100 1,107 256 126 103 38,960

Table 2: Projected Language Services Revenues and Regional Distribution Source: Common Sense Advisory, Inc.

There are a couple of important changes we noticed in the distribution of language services revenue from last year to this year. Our data indicates that North American suppliers continue to hold a nearly identical percentage of the global market share as they did a year ago (48.5% last year, 49.25% this year). Western Europe, on the other hand, has risen to the second spot (21.13% of the global market share), where one would expect it to be. After all, the gross domestic product for France, Germany, Switzerland, and other countries in the region is significant. Northern Europe, while home to many large providers as well, has fewer numbers of suppliers, and thus takes the third spot. Asia has charged ahead of Southern Europe, and would probably hold an even larger percentage of global market share were it not for the low costs of services in the region, but we expect this to change as China, India, and other countries continue to strengthen. We also noted that Oceania moved ahead of Latin America and Africa. Right now, these last few regions contribute very small amounts of revenue, but we expect this to change in the years to come. For the market growth estimates by region listed above, we applied the same growth rates in each region as we saw in the larger sample. This was primarily because the data indicates that revenue range and number of full-time employees are better indicators of growth than region of headquarters. However, we will evaluate the region-specific growth patterns in more detail in a future report, in order to provide a country-by-country and year-to-year comparison.

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The Top 50 Language Service Providers

Past Estimates and How They Compare with Current Ones

There are a couple of items worth noting regarding our current estimates compared with previous ones: The 2011 starting point was larger than anticipated. We had estimated that the market would surpass US$26 billion in 2010, but the data reported to us shows that it actually went beyond US$29 billion. We had estimated last year that the market would not exceed this amount until 2011. However, the larger number of companies reporting exact revenue this year leads us to believe that our sample is more representative of current market realities than it was last year. Even though the samples were of a similar size, more companies provided us with exact revenue data this year than ever before. The market is growing at a slower pace than previously thought. Last year, we estimated that the underlying market was growing at a rate of more than 13%. However, this year, our study suggests that the actual market growth rate is nearly half that amount. Its important to remember that the growth rate for the market itself is not necessarily a good benchmark for companies to use as a basis for comparison with their own growth. Instead, the growth rate of 7.41% reflects the growth of the market at large the rates of growth for individual companies that are proactively going out into the market with a goal of increasing revenue are typically much higher.

To provide a broader view, what these two findings mean is that our five-year projections as published last year are nearly identical to this years projections, with the exception that the market is currently larger than previously anticipated, but remains on track to reach a similar size within the timeframe we provided earlier.

Additional Findings from Our 2011 Study

This years study also enabled us to share year-to-year comparisons in order to determine how the market composition changed from 2010 to 2011. For example, we were able to track the changes in the fastest-growing services that make up the market. In addition, we produced numerous other benchmarks, such as growth rates by company size, average revenue per employee by country, and average total revenue per language service provider (LSP) by region. We reveal these findings, along with eight region-specific rankings and analysis of the trends that are shaping the market in our in-depth report on the state of the industry (see The Language Services Market: 2011, May11).

Copyright 2011 by Common Sense Advisory, Inc. Unauthorized Reproduction & Distribution Prohibited

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