“We shape lives by revolutionizing the way things are made” is Stratasys’ new mission statement. Gartner colleagues and I visited the company’s Eden Prairie MN facility last week to meet with members of its senior management team in order to learn more about how Stratasys plans to execute on that vision.
2015 has been a tumultuous one for the largest pure-play 3D printer manufacturer by revenue and units shipped. Stratasys’ stock price went from $81.05 on January 1st to $24.90 on December 21st. Its unaudited 9 months revenue through September 30 went from $533.0 million in 2014 to $522.6 million in 2015.
As it moves through 2016, Stratasys will be shifting its go-to-market strategy from an evangelistic focus on how 3D printing enables prototyping as well as creating the tools, jigs and fixtures that are used in production to a practical, solutions-oriented focus on the manufacturing of finished goods. The company will enable this through a growing range of printers, technologies and materials, print services and consulting as well as collaboration with educators, researchers, customers and partners.
The global market for 3D printers and services such as Stratasys offers is robust and growing. We are forecasting strong growth for the 3D printing industry through 2019, despite the difficulties that Stratasys and 3D Systems have had over the last year. The fundamental 3D print market growth drivers are sound:
- CAD and modeling software developments that enable not only ease of creation but also “hit print” file output
- New engineers and others who are entering the workforce with training in 3D printing
- Improved print finish and detail along with better quality assurance tools
- Improved mechanical properties based on materials and processes
- Production economies of not only short runs but also increasingly longer runs
- Product personalization and mass customization
- Design freedom that enables goods that cannot be made with any other technology
- Wide and growing range of 3D printable paper, plastic and metal materials
Overall, the CAGR revenue for 3D printers sold through 2019 will be 72.3%. The CAGR for Stratasys’ product lines are similarly strong — material extrusion printer revenue will grow at 82.9% and material jetting printer revenue will grow at 62.5%.
Stratasys’ “long game” involves these four key approaches:
- Expand support for prototyping and tooling uses across industries while developing a new approach for the manufacturing market in key vertical markets
- Cultivate a “high touch” sales team to introduce 3D print technologies and solutions into new accounts and applications such as high-value manufacturing while continuing to leverage its reseller partners for sales, product and service delivery
- Deliver engineered materials and printers capable of supporting and extending its strategy
- Incorporate Stratasys material extrusion technologies into MakerBot so its “Replicators” function at the level necessary to continue growing in the enterprise desktop printer and education markets
Stratasys has been around since the beginning of what was then called “rapid prototyping” and into the days of “additive manufacturing” and, now, “3D printing.” Its material extrusion, or fused deposition modeling, technology is core to consumer 3D printers worldwide as well as core to the higher end printers used by many enterprises and 3D print service bureaus. Its Solidscape subsidiary’s material jetting printers use proprietary jetting heads with 4 times the resolution of the best commercial paper printing inkjet presses from the likes of Canon, HP Inc., Ricoh and Xerox. Its patent portfolio further substantiates not only the company’s R&D investments but also its staying power in the market.
Execution will determine whether the strategy fulfills the mission. As one of my colleagues put it, “The Stratasys story is all about the long-term but I think they may have difficulties in the meanwhile with expenses, rabid competition, and confusion in the marketplace.”
Josh Claman, Stratasys’ Chief Business Officer, and Jonathan Jaglom, MakerBot’s CEO, have moved aggressively to address the high cost of sales by aligning expenses and revenue while sustaining R&D investments. Unlike five years ago, competitors exist in nearly every company and every one of them has been emboldened by the financial difficulties experienced by Stratasys and 3D Systems. And a 3D printing marketplace confused about what all of the vendors can realistically deliver today (and especially tomorrow) is symbolic of the Gartner Hype Cycle’s “Trough of Disillusionment,” when buyers come down from the highs of the “Peak of Inflated Expectations.”
The 3D printer markets that it plays in are growing. Competition is intense and intensifying. 2016 will determine whether Stratasys’ long game has merit.
Tags: 3-d-print 3d-print 3d-print-service-bureaus 3d-printer 3d-printing additive-manufacturing canon hp-inc hype-cycle makerbot makers material-jetting prototype prototyping rd ricoh solidscape stratasys xerox
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