Outsourcing localization Initially, many software publishers, such as Microsoft and Oracle, established in-house localization teams who had to adapt the products for key international markets. A large portion of this effort was obviously the translation of the software product itself and supporting documentation. US companies often decided to place the localization teams in their European headquarters, many of which were based in Ireland.
Even though it seems that localization vendors are now moving activities to many locations across the globe, Ireland established itself as the leader in the localization industry during the 1990s. Over the past 10 to 20 years, the Industrial Development Authority (IDA), a semi-governmental body, had the mandate to move Ireland forward industrially by attracting foreign investment. In the 1980s, a high concentration of manufacturing companies started in Ireland, including some high-tech companies. The Irish government provided what it called turnkey factories, where a large multinational was offered a certain amount of government subsidy per employee, plus facilities, grants and a corporate tax rate of 10% as an incentive to invest in Ireland. After some failed investments and the increased competition from manufacturing in cheap labor markets, the Irish government switched its focus to research and development and the high-tech, blue-chip companies, that is, a more long-term strategy. Most large software and Web companies now have a presence in Ireland, with the bulk of their localization being managed from there, including Microsoft, Oracle, Lotus Development, Visio International, Sun Microsystems, Siebel and FileNET. The key benefits they offered these companies included a certain amount of money per employee, a 10% corporate tax rate and exemption from value-added tax (VAT).
All products, including software, exported to 24 The Evolution of Localization Europe are exempt from VAT in Ireland. In addition, competitive labor costs, with social costs at approximately 12% to 15% per employee, mean that it is cheaper to employ people in Ireland than in many of the European Union countries. Compared to the United States, development costs are still lower in Ireland. And Ireland offered a young, well-educated, motivated work force. Approximately 50% of the population was under 25 at the beginning of the 1990s. The Irish government has invested a great deal of subsidy in education. There now is a strong push to offer additional computer courses to cope with the growing demand for IT and localization staff. This, combined with the fact that Ireland is an English-speaking nation on the edge of Europe that serves as a gateway to Europe and the Euro zone, made many US-based companies decide to base their European headquarters or distribution centers in Dublin.
Translators, localization engineers and project managers were recruited from all over Europe to be trained and employed as localizers in Ireland. For most translators, it was their first introduction not only to computers, but also to the concepts of software localization. Although Dublin in the late 1980s and early 1990s was a very attractive place for localization experts, with many job opportunities and a strong social network, software publishers began to doubt the validity of the inhouse localization model. Not only did new recruits face a steep training curve, but the rapid growth of products sold internationally and the content explosion also created large localization departments that were difficult to sustain.
Business fluctuations—very busy just before new product releases, very quiet after—contributed to this problem, as did the difficulty of keeping translators in another country for a long time because localization really wasn’t very exciting (imagine two months of translating on-line help files) and not always well paid. Software publishers increasingly realized that localization was not part of their core business and should ideally be outsourced to external service providers.
Source: The Evolution of Localization, BERT ESSELINK / Solution Architect, Lionbridge