We usually don’t comment on other companies with solutions alternative to Text United. But today I am going to make an exception, because the exceptional has just happened: Mark Lancaster, the founder and CEO of SDL, the proud owner of TRADOS, TRIDION and the whole bunch of other technologies has stepped down unexpectedly on Friday. SDL left no comments on the makings of this decision and offered only an assurance that the financial results for this year are ‘within the market expectations’. But Mark’s stepping down is a big, if not an epic deal. Let me tell you why.
First, SDL’s journey was incredible. Just check this (source: SDL’s website):
The trip from a company born in a bedroom in 1992 to 260 mln £ market cap in 2015 is an achievement on its own. Kudos to Mark and his vision! But there is another side of this coin. The blue line below is SDL’s share price from February 2012 until now. Compare it to NASDAQ performance (which is the red line).
Not that great from SDL’s perspective, is it? I would not be very, very surprised to see an impatient large shareholder(s) and/or the Board member(s) concerned with these figures. Clearly there must have been some issues and yes, I think there were. SDL with its Trados-based portfolio resembled Microsoft quite a lot for some time, at least in the translation industry.
Trados, which is a mature (shall I say: old-fashioned?) piece of translation software, enjoys a large market share, especially with its desktop incarnation. But it is a shaky foundation for a broader, more comprehensive and inclusive platform which SDL needs. Similarly, other systems from SDL arsenal do not offer much help in this respect, plus they do not enjoy similarly overwhelming market domination as Trados does. So is Trados for SDL what the old Office was for Microsoft? Well, I see at least some similarities.
Let’s rewind things now and remind ourselves that Microsoft needed Apple, Google & Co to kick-off strategic changes in the old and good (?) MS offering before they arrived with Windows 10 and Office 2016 (and enjoyed a recovery in MS share price in the process). So perhaps SDL does have its own Apple today?
I think it does, and it might very well be ….. Adobe. Surprised?
It is not a secret that for some (long) time SDL had technological ambitions and wanted to reach stratospheric growth in area of marketing platforms, alias ‘customer experience management’. Let’s be honest – this is not a bad idea at all. Unfortunately for SDL, Adobe was on it too. And, to makes things worse for SDL, Adobe executed it far better.
2015 sales growth for Adobe’s Marketing Cloud is expected to be 30% while SDL’s technology bookings reported this year are flat. So, the technology glory days seem still to be distant.
If so, is it end of the road?
But don’t sign off SDL just yet. They have some good cards in their sleeves (think translation services) and they are after their own Satya Nadella now. If this hire goes well, the amazing story can continue. The new person will have a great foundation laid down by Mark, but s/he will also have to make a few, undoubtedly very difficult, choices which must prove right. No room for any mistakes there.