The global language services market size: ca. 37.19 bln US$ Market continues to grow: 6.23% (2014), 5.13% (2013), 12.17% (2012), 7.41% (2011) Expected.

The annual review of the The annual review of the language industry trendslanguage industry trends

Grzegorz Wójcik, MAGIT

The global language services market size: ca. 37.19 bln US$

Market continues to grow: 6.23% (2014), 5.13% (2013), 12.17% (2012), 7.41% (2011)

Expected to reach 47 bln US$ by 2018

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Source: CSA , 2014

Language services market

High fragmentation:most companies have below 10 employees

Only 500 companies have 50+ employees

100 top LSPs represent 12.8% of the market (2013)

Over 27500 LSPs*

3

Source: CSA, 2013/2014

Language services market

LSP = Language Service Provider

4

Source: CSA 2014

Eastern Europe’s share of the market:- 2.44% (ca. 0.9 bln US$)- to reach ca. 1.16 bln US$ by 2018

Top 20 LSPs cover 24% of the market Only CZ, RU, PL private companies

in Top 20 Moravia – leader by far

Language services market – Eastern Europe

5

Source: CSA, 2013/14

Eastern Europe

Top industries for language services Global market

Shares of top 5 above: 9.3%, 6.2%, 6.0%, 5.7%, 5.6%

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Investors believe in companies that bring new approach to servicing translation buyers (Smartling, Gengo, Safaba) or bring good growth, operational efficiency

February 2015: Clarion Capital Partners, LLC (US private equity firm) has acquired a majority interest in Moravia

Moravia:- founded in 1990, Brno, Czech Republic- 100.8 mln US$ turnover in 2014, 850+ employees- the first localization company to achieve 100 mln US$ organically (private company)

Language services market – Eastern Europe, investments

7

October 2014: Argos acquires SH3 Inc. and rebrands to

Argos Multilingual

- Argos Translations (Kraków, Poland), founded 1996.

Focus on translations for IT/software and life sciences

- SH3 Inc. (Kansas City, USA), founded 1980. Translation

supplier for the US industrial manufacturing sector

- Before they cooperated for 15 years

- About 100 staff all together

It seems to be the first acquisition of this type

Language services market – Eastern Europe, investments

8

April 2014: XTRF, developer of XTRF translation

management system, attracted the first round of funding:

- XTRF is based in Kraków, Poland

- XTRF has grown 100% annually for the last few years

- Experior Venture Fund provided ca. 1 mln euro for

product and company development

- Experior got a minority stake in the company

Language services market – Eastern Europe, investments

9

Wave of online translation companies (OTC)Like Gengo, OneHourTranslation, Tolingo, some based on close to crowdsourcing model

Client friendly workflowGo online -> get a quote instantly (cost calculators) -> pay in advance by credit card -> get your translation quickly (track the progress online)

Online localization platformsLike Transifex (a cloud-based localization platform) or Lokalise (apps, games or websites) –platforms (subscriptions) + can supply translation teams

OTCs start with focus on shorter, simpler jobs But then try to add premium services and reach also big clients

Will OTCs replace "traditional" LSPs? Will they cause the “Uber” effect?

Language services market – trends: online translation companies

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Gengo introduced "performance transparency". They publish online raw data on customer satisfaction and first response time

MemSource: integration with "Gengo human translation engine"Source: Gengo website, 15 March 2015

Language services market – trends: online translation companies

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Global resource competitionTranslation services can be done using linguists from anywhere in the world. It results in more competition and lower rates.

Levels of quality, "good enough"More clients started to accept several levels of quality – depending on type of content, markets needs and intended purpose.

Shortage of resources, scalability problemsIn certain areas of the market LSPs can not find enough resources to handle clients’ needs.

The technology impact on revenue: MT and platforms- MT is widely available. Volume of post-editing MT jobs increases. Often PEMT cannibalizes revenue from human translations.- The next wave of easier-to-implement software for translation management (such as Easyling, Memsource, XTM, Smartling, and Transifex). They help to decrease (or even eliminate) staff.

Language services market – general trends

Thank you.Thank you.

Questions?Questions?

Grzegorz Wójcik, MAGIT Grzegorz Wójcik, MAGIT grzesiekw@magit.plgrzesiekw@magit.pl