The 3D Printing Acquisition/Merger Everyone is Talking About

Cue the coronet! Last Wednesday, June 19th, news broke that  Stratasys, the large, corporate industrial 3D printing company would be acquiring MakerBot, the formerly spunky, edgy and dare I say scrappy 3D printing start-up based in Brooklyn for $403 million in stock. The business deal, which billed as an acquisition or merger, depending on the media source, was reported by the Washington Post, Wall Street Journal and New York Times . I managed to catch a live stream of the announcement of the acquisition made by chief executive and co-founder of Makerbot, Bre Pettis and the president of Stratasys, David Reis at MakerBot headquarters on Thursday morning. This was fascinating, given how different the background of these two companies are and the way in which their leaders reflect this. To see what I mean first hand, you can check out the archived press conference here.

Stratasys, which was first created in 1989,  is one of the largest companies in the 3D printing industry. It’s co-founder, S. Scott Crump, developed and patented the Fused Deposition Modeling (FDM) technology which is one of several different additive manufacturing approaches, but definitely the most popular technology used for consumer-oriented printers. Makerbot’s 3D printers, such as the Replicator, uses FDM, although prior to the merger, it used the term fused filament fabrication to describe the technology, since Stratasys holds a trademark for FDM.

MakerBot’s latest 3D printer- The Replicator 2
Image Source: MakerBot

The rumor that Stratasys would be buying MakerBot has been ruminating for the past couple months in the 3D printing community and it doesn’t seem like a complete surprise that MakerBot and Stratasys would strike a deal that would seem mutually beneficial for both parties. But in any scenario where a former start-up that has accumulated a large base of devoted fans and loyal customers gets acquired by a larger player, there will undoubtedly be critics who believe that the underdog has sold out and will compromise the very characteristics of the company and its products that attracted people to it in the first place moving forward. I’m thinking for example of the backlash from Goodreads users in reaction to its purchase by Amazon or the controversy over Yahoo!’s acquisition of Tumblr. A quick scan of people’s general response to the 3D printing acquisition reveals that there are certainly mixed feelings about the acquisition. You can see a selection of responses to the acquisition here. Members of the 3D printing community are split with regards to the impact that this business deal will have on the democratization of the technology.

3 Fortus 3D Production Systems: 250mc, 400mc and 900mc

Several of Stratasys’ industrial 3D printers.
Image Source: Stratasys

There are several salient arguments for and against the purchase of MakerBot. First, advocates of the deal assert that MakerBot will be able to take advantage of all the resources (expertise, intellectual property, distribution channels and global presence) that Stratasys as a pioneer in the 3D printing industry has to offer. The expertise and intellectual property  is particularly interesting to consider because in 2012, Stratasys acquired another large industrial 3D printing company, Objet, which used a different technology for its printers, called PolyJet. The advantage of PolyJet technology is that the print quality is extremely high and individuals can use a variety of materials with different properties, even combining multiple materials during one print. This means MakerBot would theoretically have access to the engineers, scientists and technologists who have expertise in both FDM and Polyjet technologies. By acquiring MakerBot, Stratasys will instantly have a significant presence in the consumer-oriented 3D printing market, which it attempted to enter several years back through a collaboration with HP, but was relatively unsuccessful.

Access to intellectual property was another substantial motivation for MakerBot. From the beginning, Makerbot was a proponent of the open source movement in the 3D printing community. The very first MakerBot  3D printers were derivatives of the first open source 3D printing project, RepRap, and used ReplicatorG, the open source software used to run these machines. The RepRap initiative came about after several key patents for 3D printing expired in the early 2000s. Makerbot also made the build instructions and documentation for earlier versions of its 3D printers like the Thing-O-Matic freely available on its site for anyone who preferred to acquire and assemble the machine herself rather than ordering a MakerBot kit. But today there are still a number of patents held by large industry players like Stratasys and 3D Systems which impact things print quality. For example, Stratasys owns a patent on a completely enclosed heated build tray.

Those who are against the acquisition are concerned that it will have a negative impact on the way MakerBot designs its printers, sells its products and the extent to which it will support the community of 3D printing users (remember, MakerBot started Thingiverse, the largest online repository of freely available 3D digital object designs). What is interesting here is that MakerBot was created only after the patents that Stratasys held for years expired- it thrived on an open source approach to developing 3D printing technology for the consumer market. But what you have now is a company that has outgrown its start-up shoes and has had to make some strategic business decisions in an increasingly competitive consumer 3D printing market in order to stay ahead of the game and remain financially sustainable. The issue with building a company on open source technology is that this means that everyone else has access to it too, and people who were once your ardent supporters can become your most ardent competitors if they think they can create a better product than yours.

As technologists, journalists, business analyst and 3D printing users are trying to figure out what this will mean for the technology moving forward, something to contemplate is the way in which this acquisition calls attention to the role that the market plays in the trajectory of technological evolution. Will the MakerBot and Stratasys deal further commoditize 3D printing at the expense of its openness or provide users with greater options, more sophisticated and higher quality 3D printing, without compromising the open source aspect of the technology? Perhaps the real question should be, whether the democratization of a technology should and must involve open source development or whether democratization can exist within a purely commercial and closed business model.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s