A few weeks ago, the Common Sense Advisory, which is the leading company for LSP market research, released a long research report on the LSP market for 2011. Part of that report included a 9 page section on the top 50 language service providers. The list included their names, country, yearly revenue, number of employees and number of offices. The list was 50 providers deep - which is significantly more than previous years – but a total of 912 translation companies were surveyed for the Common Advisory research and top 50 list.
Surprisingly there were quite a few companies in the top 50 language service providers of the world that had less than 50 employees, and 5 or fewer offices. Språkservice Sverige AB in Sweden has only 40 employees and 2 offices, and it comes in at number 23. The Concorde Group in the Netherlands has 75 employees and 2 offices, and makes the list at 38, and Japan’s Chizai Corporation has 75 employees and 3 offices at number 48. It just goes to show that by comparison with the top of the list, smaller regional translation companies can still make a big impact. It will be interesting to see if these smaller LSP companies move up the list in 2012.
What is not so surprising is the total market revenue percentage from the top 50, versus the percentage of the total LSP market they represent. The large, multi-million dollar LSP companies are not common – the top 50 make up less than one-fifth of 1% of the total LSP market. Out of a total of 25,256 providers worldwide, the 912 who were interviewed account for 3.6% of the total LSP market – and 17% of its total revenue. It’s pretty typical for the top-earning minority in any industry to hold a much larger proportion of market revenues. The remaining 24,344 companies who were not surveyed, or 96.4% of the total market, all contribute much tinier individual revenue percentages. Most language service providers worldwide are small private companies with yearly revenues under $1M – when all combined, make up an immensely splintered market.
What I found to be two of the most noteworthy characteristics about the top 50 providers:
1. Many, or even most, are not direct competitors, because
2. Most of the top LSP guys specialize in one or two services in one of the 3 major branches of language services: localization, interpretation or translation.
Some offer services mainly in technology localization, others specialize in only telephone interpretation, and some offer technical translation within a certain industry - but very few market themselves as a provider of general language services.
To cite some specific examples, Verztec Consulting PTE Ltd of Singapore specializes in business management solutions like conference interpretation, multilingual staffing, multilingual web content management, and other language services for business management type stuff. CSOFT International, which headquarters in China, focuses on multilingual software development and application testing, terminology management and language service technologies. RWS Holdings PLC , based in the UK, focuses almost entirely on patent translation, searches and and databases. Before finding this out, I would never have guessed that an LSP company could be a multi-million dollar giant, just by searching and translating patents.
Which begs the question (or questions, actually): just how many different specialized services can any given LSP company offer? And, secondly: What specialized services seemed to be the most popular and/or the most in demand? So after a little bit of research, here’s what I found:
For the most part, it’s more common for North American LSP to offer general language services across or 1 or all 3 subcategories. Although to be fair, a large proportion of top 50 LSP companies in North America provide services to government entities, like the military, D.O.D.,public welfare and other departments – and, as you can imagine, it accounts for huge chunks of their equally chunky annual revenues.
It’s also much more common for the little LSP guys to offer general translation services, except for in Asian and South Pacific regions. Emphasis on general technical translation is more common around those areas, but even a lot of smaller companies offer specialized services. For instance, some specialize in legal documents, another in automotive, manufacturing and electronics. Technical manual translation specialty services are provided by several Chinese and Japanese LSP companies. MCL Corporation is a Japanese LSP who provides not just specialized services for pharmaceuticals, drug development research and medical articles/books, but they also specialize in primarily Japanese language translations for those documents. So you have companies that narrow their services not only according to industry or document types, but also by language pairs. This is found a lot in Western European companies, too.
LSP in Europe is pretty diverse, but there were quite a few agencies specializing in law and finance. Specialized technical and technological language services seem to be the big thing, though – anything from software to medical tech to desktop publishing, and even laser technology. One of the most unique LSP agencies is one in the UK by the name of Balthasar Ltd, which offers language services almost exclusively for the HVAC industry: heating/cooling, air conditioning and ventilation – kind of like a blue-collar LSP for VoTech. Pretty cool, actually.
So what’s the point of all this, besides a lot of numbers, percentages and annual revenue figures that don’t have squat to do with your next translation project? By looking at this research we can see what services are growing and which services seem to be the most in demand, as well as what market trends made significant ROI. The research provided a projected annual market growth of 7.41% - this gives every company at least a starting point by which to set company goals. However, Common Advisory does note that companies who set out with the specific goal to increase annual revenue aggressively, usually have much higher growth rates. There are growth rates according to regional market contributions as well, meaning that LSPs in Istanbul will have different growth rate averages than they do in Florida. If nothing else, companies who wish to grow in size, revenue and overall market contribution have 50 LSP companies to look to as exemplary case studies. Its not a new idea for those who wish to be successful to study those who already are.
But the overall theme here is that there is plenty of room for all language service providers: from the top 50 giant companies, to the highly specialized, and of course, the guys with small companies and general services – which are not to be ignored or overlooked. On the contrary, the small companies make up over 95% of the market, and offer more affordable translation rates for individuals and businesses wanting to increase bottom line revenue. If you are looking to cut costs for your business, would you hire services from a giant, multi-million dollar company whose translation rates reflect their size – or a small, modest translation company with very affordable rates and the same competent services? The answer is obvious.
