When two houses of the additive manufacturing world intermarry, what drives the alliance? And what do other players in the additive game need to know (or be concerned about) regarding how things might change?
Last week, one of the additive manufacturing industry’s largest players, Stratasys, announced the intention to purchase Desktop Metal. Stratasys deals primarily with polymers, a meaningfully different technology than metal-based additive, so this feels like a fitting and complementary pairing.
Assuming the deal goes through (and Stratasys sure seems serious about staying this course, rejecting on May 30 a buyout offer from 3D printing company Nano Dimension), how could the merger of two of the most profitable additive manufacturing companies in the world change the 3D printing industry's landscape?
Making Additive Manufacturing Everything It Should
On the May 24 call announcing the merger, Stratasys CEO Yoav Zeif said that additive manufacturing hadn’t lived up to its potential for mass production, with quality, cost per part and process reliability as chief concerns.
“The cost per part is certainly a top consideration. It is important to understand that building a business case around the use of AM for production applications is done on a case-by-case basis. In some cases, AM is the clear choice, but in others, it is not. Design, production volumes, and qualifications/certifications are among the many factors that impact the decision,” says Terry Wohlers, head of advisory services and market intelligence at Wohlers Associates, the recent addition to the ASTM International family of organizations.
“One of the biggest barriers … to broader adoption of additive manufacturing in production workflows, has been the challenge of consistently and reliably producing effectively identical parts. Cost is a secondary concern just now,” says Paul Miller, VP and principal analyst at Forrester.
Building Trust in Additive
Zeif also said the merger was needed to scale the companies to assure big manufacturers that they could trust additive suppliers.
“Company size can play a role, but it does not guarantee the delivery of quality products and services. I have seen relatively small companies deliver successfully, decade after decade,” says Wohlers.
“As additive manufacturing plays a bigger role in manufacturing processes at some of the world’s largest industrial companies, there’s clearly value in those firms being able to select partners with the size and financial strength to be able to operate and scale internationally,” says Miller. “There are already big firms with products in the additive manufacturing space, but I fully expect to see further mergers and acquisitions as some of the startups here recognize that they don’t have the scale and reach to be able to succeed alone.”
Finally, even though Stratays and Desktop Metal mostly deal in different materials, does this come down to a matter of leading companies combining to offer an all-in-one solution for customers, or might casual observers miss other, less obvious reasons for the merger?
“Desktop Metal’s ETEC (formerly Envisiontec) offers polymer solutions. The merger is partly about materials, but it extends beyond them. It is also about market share, distribution channel and diversity and attractiveness of product and service offerings,” says Wohlers.
Miller adds, “Firms like Stratasys and Desktop Metal have learned a lot about improving print quality and consistency, developing better printers and leveraging materials science to develop better print materials, but also enhancing software and workflows to minimize the adverse effects of the environment around those printers. Despite historically focusing on very different materials, there will still be opportunities to benefit from the lived experiences coming out of both firms.”
