Is 3D Printing Ripe for Consolidation?
Todd Grimm posted on March 01, 2012 |
When 3D first announced its intent to acquire Z Corp from Contex, shock and disbelief were early rea...

Mergers and acquisitions text graphicA few months back, 3D Systems completed its acquisition of Z Corp. This is the latest in a long stream of acquisitions of hardware, materials, services, design, software and content companies. To a much lesser extent, other 3D printer companies have also been acquiring complementary companies. For example, Stratasys purchased Solidscape, and EOS acquired ALM and Integra.

When 3D first announced its intent to acquire Z Corp from Contex, shock and disbelief were early reactions. Once that settled down a bit, many conversations turned to industry consolidation.

It is my belief that in time, the 3D printing industry will consolidate, but not now. I haven’t asked 3D System’s about its intents, but I would be very surprised to hear that consolidation was a driving force.

The reason is simple; the industry isn’t ready.

Take for example the personal 3D printer market. If anything, 3D Systems’ 2009 acquisition of Bits From Bytes and its recent launch of the Cube put the company smack dab in the middle of an expanding segment with new players emerging every day. There is little barrier to entry for these RepRap derivatives. The open source nature of the core process invites anyone with the money and guts to start a 3D printer business to give it a go. With little differentiation from one player to the next, 3D Systems will have to work hard just to stay on top.

A story for another day is the impending constriction of the consumer printer market. The market isn’t big enough to support so many players.  

Another example is that 3D printing is not process stagnant. In the past few months, four new processes from four companies new to the industry have been announced. There will be more to come.

On the services side, I really believe that consolidation attempts would be foolhardy. The ranks may be thinned, but new companies will spring up. Also, it is hard to conceive that a few general-purpose bureaus would conquer all applications and industries.

For services, what I could see in the somewhat near term is consolidation in specific niches. These could be by industry (e.g., medical device or architecture) or by applications (e.g. contract manufacturing of production goods). Just take a look at the 2D printing world to which we liken ourselves. There are top three printing companies for specific applications (e.g., annual reports, trade publications or packaging), but there isn’t a top three for the entire printing industry.

Consolidation, which isn’t a bad thing, is in the distant future. Consolidation is possible when an industry reaches maturity or stagnation. For now, expect to see more new companies, more mergers and acquisitions, more new technologies and lots of new options.

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