Meet Mister Speakeasy

Foreign languages are Mark Lancaster's business. His company, SDL, translates software and is tapping into a rich vein as the world of information technology grows ever larger. It's a good job - even if people do think he looks like the teaboy
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Even by the laid-back standards of the information technology industry, Mark Lancaster cuts an informal figure. The 38-year-old founder of SDL International wanders the converted Thames boathouse that serves as one of his main offices in scruffy jeans, trainers and company shirt. Followed by the family dog. It is a long way from the popular image of the head of a publicly quoted company, even in the New Economy. But Mr Lancaster is far from conventional.

Even by the laid-back standards of the information technology industry, Mark Lancaster cuts an informal figure. The 38-year-old founder of SDL International wanders the converted Thames boathouse that serves as one of his main offices in scruffy jeans, trainers and company shirt. Followed by the family dog. It is a long way from the popular image of the head of a publicly quoted company, even in the New Economy. But Mr Lancaster is far from conventional.

"When I first meet people I know 90 per cent think this is a tea-boy," he says. "But when you start speaking that goes away. Because it's fairly evident you know what you're talking about." Is this an act designed to throw the unwary? After all, he is coming over like a student in the college bar and almost in the same breath stressing that his corporate background has been an important factor in putting SDL at the forefront of a rapidly developing area of communications technology.

Maidenhead-based SDL translates computer games, websites and other forms of electronic communication from English to other languages. It has, for example, contracts with Microsoft, Sony PlayStation and the personal organiser maker Psion. "My vision has always been that people are not going to speak the same language," says Mr Lancaster. "They are going to maintain their own language. To sell into a local market you need to speak the same way that market is speaking," If the market is France, that means not just speaking French, it means complying with the French culture and communicating in a way with which the people feel most comfortable, he adds.

Mr Lancaster first saw the need in the early Nineties, when he was the international development director for software company Ashton-Tate. With a remit to get products global in the shortest time possible concomitant with cost-effectiveness, he sought companies he could outsource the translation, re-engineering and other necessary processes. "That company just didn't exist in that time," he says.

After Ashton-Tate was taken over in 1991, Mr Lancaster decided to fill the gap himself. He started Software and Documentation Localisation (SDL) in his living room with just £45,000. Initially it provided only consultancy services. That aspect remains and provides the revenues that enabled the company to break the IT start-up mould and make a profit for most of its life.

But Mr Lancaster believes SDL is special because of its combination of services and products. The key products are SDLWebflow and SDLX. The former is a combination of alert system and business process software, which helps to automate what is involved in maintaining multilingual websites. It reduce dramatically the time between a client's main website being changed and its satellite sites being updated correctly. SDLX is a suite of translation memory software designed to partially automate the translation process through the use of previously translated phrases and commonly-used terms. It cuts translation time on client documents and has a significant impact on the efficiency of the group's pool of translators.

The combination of the two enables SDL to offer a market-leading solution for the multilingual content management of websites. In the wake of the positive interim figures - showing a pre-tax profit of £0.6m in place of the forecast loss of £1.1m - published earlier this month, house broker Collins Stewart issued a highly positive note on the company saying it was "convinced that the market is set for exponential growth in the next few years".

Research suggests SDL has hit on a promising sector of information technology. Allied Business Intelligence says the global market for website translation is worth $17bn to $20bn a year. This encourages Mr Lancaster to think his company is well-placed to take a significant chunk of a market with no dominant player.

About 10 years ago, says Mr Lancaster, companies probably had to have sales of $100m or so to have the critical mass to go global. But that has changed dramatically. "The Web is a stepchange for companies to be able to go global effectively, instantly, with far less cost and infrastructure. I'm sure people are global with just £2m turnover."

But international companies cannot expect a marketing or communications strategy that works in one part of the world to be effective in another. In other words, there is growing support for Mr Lancaster's original vision based on the maintenance of separate languages even as markets were becoming more international. "What made me go into this business was that, as long as technology and communications grows, the more demand there'll be for our kind of service," he says. "Take that a stage further. If you run a service company, you're always trying to maximise the way you do things. Two to three years ago we had the vision to start to develop products that allow us to be more efficient."

Those products are SDLWebflow and SDLX, and, says Mr Lancaster, "everybody needs that type of product to be more successful rather than just throwing people at it". He does not claim to have all the answers. Much of the development of those products was done in Sheffield, where - after SDL acquired Polylang in December 1997 - the company had 120 people spread over two sites. This May, the company acquired the Irish business International Translation and Publishing from distribution group DCC, giving SDL an international base with offices in Japan, China, Italy, Hungary and Spain. There has been some suggestion that SDL was stretching itself by paying £17m, including taking on debts, for a loss-making operation that was facing increasing competition from Berlitz and others. But at the recent results the company said it had moved into break-even six months ahead of schedule.

SDL's rapid growth means the company has to hire more people and Mr Lancaster is not hugely impressed by much of what he sees among the pool of available workers. "The salaries have gone ridiculously through the roof," he says. "You have inexperienced people taking roles that they just haven't got the experience to do."

Mr Lancaster might be relatively familiar with the ways of big companies but he does not have a classic corporate background. He started with the GEC subsidiary Satchwell Control Systems. He says he got the job through "a friend of a friend". The company typically hired only graduates from Oxford, Cambridge and other top universities. He studied electrical and electronic engineering at Hatfield.

Mr Lancaster, who says his wife and three daughters are his only interest outside the company, laughingly describes the degree as "a big mistake because there aren't a lot of women on the courses". It gave him a "solid grounding" but, he adds: "I found the computer lessons so incredibly boring. We spent half a semester switching on a traffic light system."

At Satchwell, he did get hooked on computers and when he realised he knew little about them he took an MSc to build up his expertise. After a couple of years, he moved to Lotus Development, as a program manager. The move to Ashton-Tate came a short while later, when the operation was moved to Ireland.

He started in a similar role and "promoted through the ranks" to become the software firm's international development manager and the youngest member of the European board. "I learned an awful lot at Ashton-Tate," he says. "I had some really good mentors there." One of them, Floyd Bradley, was appointed an SDL non-executive director, along with Microsoft UK chairman David Svendsen, ahead of last year's flotation.

But if Mr Lancaster remains a bit of a puzzle to the City, finance director Alastair Gordon attracts a highly enthusiastic response. The chartered accountant is a decade older than the chairman and chief executive, spent 13 years with Arthur Andersen, then 10 with Berisford, the last three years of that as chief financial officer of the US operation. Even Mr Lancaster says: "The City loves him."

An asset as Mr Gordon may now be, his presence does not allay all of the financial community's concerns as the company sets out to expand. After all, not only is Mr Lancaster chairman and chief executive, his wife Cristina is operations director. Mrs Lancaster is an experienced software engineer who was a senior analyst at Lotus and ran her own IT training and consultancy business before joining the infant SDL in 1993.

But one analyst says if SDL is to really exploit the potential of a market that is seen as a way of personalising marketing messages, it needs to be able to deliver on products, services and its internet strategy. He adds: "I don't think the strong execution person is there yet."

For the moment, the City is giving Mr Lancaster the benefit of the doubt. The stock price has slipped after shooting through the 800p mark on the back of a deal with Microsoft. But both Collins Stewart and Old Mutual Securities have rated it a buy in recent notes to investors.

What happens in the next few months could prove crucial. With more than £11m in cash, SDL remains in a stronger position than most young technology companies. But it is still possibly vulnerable to bigger companies seeing the opportunities in such a potentially large market.

Berlitz and other translators could provide the service part, but Mr Lancaster sees the company's strength as being its combination of product and service. "It's very difficult to have a combination of the two," he says. "I believe we've just got a bit of a head-start."