April 1, 2014
Now that the media hype of 2013 has settled . . . somewhat, 2014 will be a pivotal year in which we see small, tangible steps towards reality. Below are a few trends and commentary on what we’re seeing in the market:
1. Ecosystem components begin to marry. Investments, acquisitions, partnerships, and new developments will focus around unifying printers, software, and services for seamless 3D printing experiences. For example, Adobe recently announced direct integration with MakerBot and Shapeways to close the gap between 3D modeling tools and what printers need to physically produce objects. Other major software vendors like Autodesk will play an evangelist role in bringing ecosystem players together to enable interoperability across proprietary platforms.
2. New startups stretch our imaginations of business model disruption. 3D printing is a catalyst for rethinking inefficient analog processes. Startup SOLS aims to disrupt the entire orthotics value chain with an end-to-end digital service for custom shoe insoles. Customers scan a 3D model of their feet, input data on weight, lifestyle, and activity patterns, and send to print.
3. Companies experiment with custom spare parts manufacturing. In 2014, companies familiar with the technology and its benefits for rapid prototyping will explore uses in printing custom parts for final products. Hot opportunities include augmenting localized manufacturing capabilities for spare parts and tools in remote locations, which is particularly relevant to oil and gas, defense, and aerospace. GE Energy is following in the footsteps of GE Aviation by announcing it will 3D print metal fuel nozzles for gas turbines this year. 3D printing is cost-efficient for tools that have multiple discrete components that need to be fused or assembled. The next opportunity will be to refine the design of tooling to exact requirements, rather than working within the limitations of injection molding.
4. A clear market leader is yet to emerge. The market today is fragmented, with the two most dominant players, Stratasys and 3D Systems, owning roughly a third of the market by revenue. Stratasys is likely to lead in installed base with the acquisition of MakerBot, while 3D Systems dominates revenue share. However, with a combined market cap of around $10 billion, both are viable acquisition targets for a diverse set of new entrants into the mix. Tech giants like HP are embracing the opportunity to extend their portfolios with plans to enter the market. And major industry brands like GE, which recently acquired a 3D printing maker, will integrate proprietary solutions directly into manufacturing processes. Given the complex dynamics, we don’t expect clear signs of winners or losers to emerge until 2015 or 2016.
5. Professional desktop market contenders MakerBot and Formlabs focus on scale. 2014 will be a strong growth year for rapid prototyping, spurred by general market hype and companies getting vocal about the business benefits. MakerBot is expanding its portfolio to accommodate larger objects and is leveraging synergies with Stratasys’ R&D group to introduce new materials to its offerings. Formlabs will focus on optimizing its Form 1 printer and put its recent round of funding to use building a partner ecosystem and distribution network to scale the business. Both MakerBot and Formlabs are in a powerful position to drop price and take on the consumer market if and when it becomes ripe to do so. Easy-to-use consumer-grade software and compelling ready-to-print content must develop for this to happen.
6. Low-cost printers born on Kickstarter fail to gain significant traction. “Artisanal” DIY upstarts on Kickstarter like Pirate3D offering consumer-grade printers made headlines across the blogosphere almost every week last year. We’re not bullish on this class of printers because they are too early to market and sacrifice quality for price. Breaking the mold is Zortrax, member of the Kickstarter class of ‘13, which offers a powerful desktop 3D printer for just shy of $2,000. The printers were quality enough for Dell to place an initial order of 5,000 units.
To learn more about emerging opportunities to digitally disrupt your business with 3D printing, see the recent Forrester report 3D Printing Drives Digitization Further Into Products, Processes, And Delivery Models.