Here are a few of our predictions for language services and software in 2006, a US$8.8 billion market in 2005.

1. The race for the mid-tier will accelerate. 2005 saw two big deals and some smaller ones. While we do not expect any mega merger and acquisition activity in 2006, we have spoken with some big companies from outside the space sniffing around, so we cannot rule out an attempt at a market roll-up. Meanwhile, expect more deals among the sub-US$20 million LSPs and ISVs seeking scale, credibility, and a global footprint. As part of this continuing trend toward populating the middle tier of the market (that is, vendors booking less than US$100 million per year), read press releases for words like “alliances,” “strategic partnerships,” and “zero-cost mergers.”
2. Companies will assess globalization practices. With years of international sales and a decade of web globalization under their belts, larger companies will review established procedures for producing documentation, marketing collateral, and training material for worldwide consumption. Seeking more staff productivity, better source and translated content, and lower cost, they will increase spending on technology to manage process. As part of this review, vendor managers will join the procurement police. Buyers of services and tools will hire in-house managers to monitor spending on external language service providers, their performance, and how well they comply with corporate practices and guidelines.
3. Planners will still hope for deus ex machine translation. Anxious to tap into corporate knowledge bases and customer demand, many more companies will experiment with MT. However, machine translation will continue to be between three and 300 years from perfection. Statistics-based leaps from Google, Language Weaver, and IBM will be limited by the availability of human-translated words as these MT players seek ever more bilingual corpora to pump up their engine’s quality and performance.
4. New software releases will strain localization resources. With Vista in view, a major release of Office in the offing, Apple’s first Intel-based systems ready to debut by mid-2006, and Intel’s ViiV entertainment platform aiming for the consumer sweet spot, localization shops will run three shifts for the next two years. Despite the locale-friendly features of Vista and powerful statistics-based layout tools from ISVs such as Alchemy and PASS, localization never happens overnight. Incidentally, these major personal computing releases will pump hundreds of millions of dollars into advertising, complemented by promotions from PC hardware, software, and accessories suppliers as every vendor tries to pump up lackluster domestic sales and strives to penetrate China, India, Brazil, and other emerging markets.
5. Emerging markets will stay on the front pages. Constrained only by oil, China will drive Asia, the Pacific Rim, and Wal-Mart. Meanwhile, the “Carpathian Tigers” of central Europe — the Czech Republic, Slovakia, Hungary, and Poland — will work with Germany, oil-rich Russia, and E.U.-wannabe Ukraine to begin to make the eastern flank of the European Union a new source of innovation, product development, manufacturing, and culture. American and European firms will look the south — Argentina, Brazil, and Chile — for new offshoring centers closer to home, time zones, business practices, and cultural attitudes.

We also expect “globalization” to become a boring villain in 2006. Despite the best efforts of Korean farmers, anti-globalization chants at the WTO meeting in Hong Kong did not attract much attention. Maybe, just maybe, in 2006 everyone will realize that job losses aside, the real enemy is not globalization but homogenization (H12N).