Language service providers take one of three routes when it comes to technology: 1) they buy most of it; 2) they build some and buy some, but keep whatever they build for their own and for their customers’ use; and 3) they build most of it and sell it, too. Most LSPs take the first path. Some invest heavily in crafting bespoke software for their own use. And to date, just SDL and STAR take the hybrid LSP cum independent software vendor (ISV) route.

When we spoke with new Transware CEO back in April about acquiring tiny GMS supplier GlobalSight, he was leaning toward the hybrid SDL-STAR model. We commented that the LSP-ISV path guarantees that you automatically exclude most rival LSPs from your prospect list — other LSPs tell us all the time that they hate buying software from their competitors.

Two months seem to have tempered Transware’s zeal to sell software. We spoke with Kelly again to see where the company is headed now that it has had time to digest GlobalSight. Transware plans to take the best of the Irish company (that is, its project management expertise and production facilities in Dublin and Sligo, Ireland) and the best of GlobalSight (its translation workflow management system, its recently rehired globalization professional services unit, and its methodology) to offer business process outsourcing for global content management and development needs.

In his review of Transware’s business and where Global Sight did sell some software, Kelly sees receptive market segments emerging in the form of medical and life sciences, high-tech, manufacturing, and consumer to complement the company’s longtime focus on e-learning.

Tackling language services as a BPO task and going after these particular verticals are not new ideas — it’s what rivals like Lionbridge have been doing for the last few years. Nonetheless, Kelly secured venture capital to buy core technology for a solid production platform, rounded up experienced globalization services talent, crafted a business plan that is more ambitious than just translating words, and plans to rely on his venture partners to introduce Transware to bigger accounts.

With fiscal discipline, a clear marketing agenda, hosted translation and content management services, and good feet on the street selling a business-driven solution, we think Transware can do some good business. However, it has to resist the urge to sell GlobalSight’s GMS product by itself, an urge that the company not yet suppressed (witness the website). Selling commercial software will result in long sales cycles, the need to hire lots of professional services and support staff, and a heavy investment in keeping a complex piece of software commercially viable. Buyers repeatedly opt for services over software, but investors prefer the valuations of software companies over service providers. It’s a tough choice for any CEO but long-term value in this segment will come from services.