GALA-moderated Teleconference on SDL Acquisition of Idiom Provides Clarity
By: Rebecca Petras (GALA) - SDL plc
05 March 2008
"Our goal is not so much focused inwardly on the industry, but rather outwardly — getting our technology plugged into content management technology systems and other technologies so it is easier for translators and LSPs to get access and do their jobs."
Those remarks, made by Mark Lancaster, Chairman and CEO of SDL, in his opening statement, set the tone for the GALA-moderated webinar on SDL’s acquisition of Idiom Technologies. The webinar, which also included Mike Iacobucci, President and CEO of Idiom Technologies, took place Monday, February 25, and was open to all GALA members. The goal of the webinar was to provide a bit of clarity for GALA members impacted by the acquisition.
Following the introductory explanations given by the leaders of both companies, the moderators – GALA Board Chair Kim Harris and GALA member/founder Daniel Carter – posed questions that had been submitted by GALA members. The questions were broad in reach and addressed many concerns of members who work directly with SDL and/or Idiom.
“Most of the questions were based on discussions Daniel and I had with LSP partners and clients of Idiom who are directly affected by the acquisition,” said Harris. “The greatest concerns involved R+D support for the partners of Idiom’s successful LSP program and the continuation of the multi-vendor functionality offered by its flagship product, WorldServer. The future of WorldServer as a standalone solution was also a topic we wanted to discuss.”
To kick off the questioning, Ms. Harris tried to get more clarity on the real benefit the acquisition offers to each of the separate companies and the industry as a whole. In response, Mr. Lancaster focused on the need to leverage the R&D and experience within each company in order to broaden the reach of the combined technology and the overall industry. He discussed the need to increase the SDL install base in order to reach a critical mass that allows for continued investment in R&D and ongoing upgrading of the product. To do so, he said, “We want to combine the Idiom product with the SDL product to get the best product possible. That is leverage. We also believe the experience of the management at Idiom gives us leverage.”
Mr. Carter followed with a question directly to Mr. Iacobucci: Why sell Idiom Technologies now when WorldServer is being adopted in record numbers? His response focused again on the need to scale a technology product in order to be profitable: “It’s very difficult to scale fast enough. Now we can do things more rapidly,” he said. In questioning later in the discussion, Mr. Iacobucci made it clear that the acquisition will help make the Idiom division of SDL profitable: “There are certain things we just don’t need to invest in the way we have in the past. It’s really that simple.”
Many of the questions focused on the impact the acquisition has on members who work directly with Idiom through the company’s LSP Advantage Program and on the separation of technology and services at SDL. Mr. Lancaster did not commit to how long Idiom will remain independent, but he did make it clear that Idiom will remain a separate business unit for now. After some time, however, the technologies will be combined into one product. “I think it helps everyone in the industry when we combine the good parts of each of the products into one product so the industry just has one product to deal with,” said Mr. Lancaster. “I do believe that SDL and Trados combination has helped the industry. With Idiom, Mike and I are planning to continue that.”
Both leaders stressed that SDL’s technology is meant for customers who want multi-vendor relationships and the partnerships that some language service providers have enjoyed with Idiom through its partner program will continue. While Mr. Iacobucci did mention that some of the relationships Idiom has had in the LSP program have not been productive, he stressed that others have been solid and that Idiom has learned how to be a good partner with LSPs. He also stated that Idiom has demonstrated an ability to keep each partner’s information secure and separate from other partners—a policy that he plans to translate to SDL and its LSP relationships.
Concern about how SDL will work with LSPs did permeate through the questioning. In response to a question by Mr. Carter on whether SDL will give LSPs assurances that SDL services will not get all possible leads, Mr. Lancaster responded, “SDL Services is separate from the SDL technology division. We remember that SDL technology is dealing with information that is confidential. And it is just not shared.” He added, “There are 8 billion translation words out there. SDL certainly doesn’t want to do 8 billion words. It makes more sense to work together as a group.”
Following the questioning by Ms. Harris and Mr. Carter, listeners were given the opportunity to pose questions in real time. One of the questions to Mr. Iacobucci addressed his commitment to speak personally with all Idiom Advantage Partners. He responded that he’s been talking to partners continuously since the announcement and will talk to all partners who wish to do so.
The call wrapped up on a discussion as to whether fees will be charged in the near future. While both leaders stressed that nothing has been decided, Mr. Lancaster did mention that there might be a charge but that it would not be high and easily in reach for LSPs.
The webinar lasted for over an hour, giving members a much deeper understanding of the acquisition and what they might expect in the near future. One member commented afterward that he was pleased to attend such an important webinar:
“When something as significant and potentially disruptive as the recent SDL acquisition of Idiom occurs, there is no shortage of speculative commentary,” said Bob Donaldson, VP of Strategy at McElroy Translation. “In this context, the opportunity to hear directly from the principals involved, as we did from Mark and Mike this week, is very valuable. Hearing them discuss their plans and respond to concerns raised helps immensely.”
Rebecca Petras is the PR and Marketing Specialist for GALA.