Tuesday, 23 July 2013

Is '3D Printing' a set of niches within niches? Roll on 3D Services

Analyzing the 3D Printing marketplace is not so easy. The term '3D Printing' is largely a media invention. As we have stressed before, '3D Printing' refers to a dizzying array of very different Additive Manufacturing (AM) technologies (layer by layer, drop by drop, voxel by voxel) sharing little in common. It is not unreasonable to suggest that many of these techniques are still very much niche technologies. That may change rapidly in the future. Today, however, even companies with viable 3D printing products appear not to be able to make it on their own.

Phenix Systems is the latest casualty. The company, like so many before it, has been acquired by 3D Systems, the aggregator of the nascent additive manufacturing industry. Founded in 1986 the giant of the AM industry still only has 1000 employees today.

Why this new acquisition in a long list?

Phenix Systems manufacture a range of Direct Metal Laser Sintering (DMLS) 3D Printers. DMLS is one of over thirty very different 3D Printing approaches. Yet even within the narrow field of DMLS there are many specialist processes. Phenix can 3D print chemically-pure fully-dense metal and ceramic parts from very fine powders with a granularity of 6 to 9 microns. Materials include stainless steel, tool steel, super alloys, non-ferrous alloys, precious metals and alumina for a variety of aerospace, automotive and patient specific medical device applications. That sounds like a huge deal. Perhaps not. Despite owning patents in this area, Phenix decided they could not make it on their own and have thrown in their towel with 3D Systems [NYSE: DDD].

Why this continuing AM industry consolidation?

Phenix Systems DMLS 3D Printers
Is it that the market for what Phenix do is just too specialized? Is it that their products only make sense if developed and marketed under a broader banner? Is it that 3D Systems sought controlling patents in this area and made an offer that Phenix could not refuse? Or is it a sign of 3D printer product commoditization?

The acquisition of Phenix Systems by 3D Systems continues a past pattern, buying up specialist companies to flesh out a solution portfolio. It highlights the nature of this marketplace: a set of niches within niches.

In such a market, customers want services, not products.

AM users do not want to buy a slew of different 3D printers to cover all possible needs, materials and processes. Nor do they want to buy into an expensive 3D printer (and everything else required to operate it) only for it to become obsolescent when a new model comes to market offering higher resolution or material stability! Companies looking to re-engineer their manufacturing to take advantage of AM don't want products, they will seek out a trusted relationship with an end-to-end solution provider, a partner who offers rich AM process options and a consistent tool chain, with integrated software.

What the media call "3D Printing" should really be called "3D Services".

What the Phenix story and others like it show is that 3D printer makers simply cannot make it on their own. Why is this?

There is no standard 3DP platform upon which to innovate new products via innovative applications. With no standard platform, 3D printer makers cannot prosper as other companies invest and create applications for them to run on their platform. This is why comparisons between "3D Printing" and the early days of the computer industry are null and void. There will be no Apple, Microsoft or Amazon of 3D Printing. Additive Manufacturing's growth is not product centric. It is a complex ecosystem of niche products, set within a broad services innovation framework.

For all of these reasons the growth curve of the 3D printing industry will not look like the exponential growth curves and hyper valuations of the digital computing industry. Rather, it will look more like the Information Technology (IT) services industry: slow and steady steers the ship.

Further: As 3D printers become more and more a commodity item, it won't be possible for 3D Systems to buy up every company on the block. Just as in the computer services industry there will be a range of services and solutions providers for every pocket and every sector of the market. They will compete not on ownership of 3D Printers and 3D Printing patents, but on what every mature industry competes on: customer service and alignment with customer needs.

Wikipedia on 3D Systems

Tuesday, 9 July 2013

Who is right about 3D printing? Foxconn or GE?

We live in strange times. Just as Foxconn CEO Terry Gou says that "3D printing is a gimmick and has no commercial value", GE CEO Jeff Immelt says he would love to 3D print jet engines ... or at least some of their largest parts.

“We make a turbine blade that is made of some of the most expensive high-heat material in the world,” Immelt said. “We put that blade through the fabrication process and the excess material is essentially waste.”

GE hopes to one day use the technology to create engine parts in a more efficient and less costly way. It would also cut down the time to design and develop an engine by half. “We’re a company that wants to own our supply chain,” he said. “This is going to be a great place to put capital.” And as we reported GE is making plans to grow better fuel nozzles.

Why these differences of opinion?

3D Printing is all about materials. Foxconn is one of the world's largest electronics manufacturing companies. It is harder to see the relevance of Additive Manufacturing to Foxconn at this stage. For GE, however, the laser sintering of powered metals has many applications.

We've said it a hundred times before 3D Printing is not one technology. There are over thirty different processes, each optimized to different kinds of materials, and they share little in common. While there could be some convergence in the far future, expect these differences to continue to generate differences of opinion about the industrial significance of 3D printing.

And that's why any analysis of the impact of 3D printing on a certain industry depends on detailed and current knowledge of the available and reliable additive manufacturing techniques.