With consolidation talk (justifiably) dominating the industry water cooler, it’s worth considering a thing or two. How relevant will freshly-announced M&A deals be, and what will happen next?
The acquisition of Paramount by 3D Systems was announced this week; the Stratasys/Object merger was announced just a few days ago; these are merely the latest among dozens of M&A deals that have been rolling in since 2009. Could the unthinkable be happening? Could additive manufacturing be closer to the mainstream than we think?
The answer is a solid maybe. After all, industry consolidation typically sets off a shock wave of growth, sending strong signals of industry legitimacy and attracting additional investment. Involved entities are better-able to build (and sell) holistic solutions and comprehensive product portfolios. Mass market effects make way for economies of scale.
Sounds great, right? It is, insofar as it elevates early players to a place of greater viability. Yet, too much consolidation (in fact, all larger steps that advance the industry toward maturity) will eventually edge many early players out.
And it’s not just early players that might get the shaft—the technology itself also stands to suffer. Larger organizations with incentives to manage to the expectations of non-organic investors often suffer from risk-aversion that hinders innovation. Lack of competition, culture clashes, and shifted focus on maintaining one’s competitive position have also shown time and again that, if companies (not to mention industries) want to keep their edge, consolidation is the beginning of the end.
Sounds awful, right? It is, inasmuch as the additive manufacturing industry will suffer the same fate as all other disruptive technology predecessors if it doesn’t watch out.
So, let’s get back to the maybe. Is additive manufacturing closer to the mainstream than we think? A better (and truer) answer than “maybe” is: it doesn’t matter. The industry is consolidating so quickly that, by the time it does hit the mainstream, many of the long-term winners and losers will already have been decided.
With better answers come better questions. Maybe the best question to ask right now is, if we really are halfway there, who will be the long-term winners and losers? Remember Commodore? IBM? Yahoo? Yeah, my kids won’t, either.