Re:Stratasys Acquiring MakerBot
by ChuckMcM on Thursday June 20, 2013 @01:32AM
(#5910365)
I think what Makerbot had, and others don't have, is a product as opposed to a hack. I love the RepRap, it's cooler than cool, but my Dad would never buy one. The Replicator 2 is a refinement over four years of iterative offerings which each informed on the next iteration. From the initial 'cupcake' (which I help beta test the build instructions on) to the Replicator to the Replicator II, each step along the way has explored materials vs handling vs control schemes vs build flow. I'm sure a few have shown up at Stratsys' customers where they give an engineer one to 'punch out' the basic concept they are working on before sending it to the expensive machine. They have also made good strides in reliability and repeatability.
In Q1 they had more revenue than all of 2012 according to some stories. So Stratasys, the current leader in 3D printers had a choice, buy them or kill them. It's pretty clear Makerbot wasn't going away.
Killing them would involve coming out with something to compete with them. That would cost, conservatively, in a company like Stratsys, about $50M and 24 months. Maybe 12 if they did the 'crack team in an off site location without interruptions and poaching.' Let's be optimistic and say there is a 50/50 chance of hitting a product that is competitive with the product that Makerbot will announce in 2015. How big will Makerbot be? 2x, 4x, or 10x their current size? If the competitive product fails what will it cost to acquire Makerbot? $1B? $2B? Will it even be possible?
Looking at it from a pure engineering play it makes little sense, after all Stratsys could use the RepRap stuff and make their own RepRap clone right? But that only validates the market which invariably favors the market leader, in this case Makerbot.
So if you think 3D printing is going to be 'the big thing' in manufacturing going forward you're kind of stuck. Stratasys had to buy Makebot or risk losing to them.
I got to live through a very similar situation at Sun. When it got big enough DEC had a problem, do they buy the upcoming workstation vendor which was using commodity Microprocessors or try to kill it? DEC chose poorly and paid for it with their own existence which let Sun move into that spot until it died. I remember reading a great article when Sun posted a $1B in annual revenue and an analyst wrote "What would DEC do with a billion dollars?" Talking about the lost revenue because DEC was avoiding open systems and commodity hardware like the plague.
Trying to guess the future is hard, very hard, but I don't doubt for a moment that Stratsys has always had the goal that if one of these hobbyist 3D printing companies threatened to break out they would buy them before they couldn't afford it. Makerbot triggered that particular outcome by building a successful product.
In Q1 they had more revenue than all of 2012 according to some stories. So Stratasys, the current leader in 3D printers had a choice, buy them or kill them. It's pretty clear Makerbot wasn't going away.
Killing them would involve coming out with something to compete with them. That would cost, conservatively, in a company like Stratsys, about $50M and 24 months. Maybe 12 if they did the 'crack team in an off site location without interruptions and poaching.' Let's be optimistic and say there is a 50/50 chance of hitting a product that is competitive with the product that Makerbot will announce in 2015. How big will Makerbot be? 2x, 4x, or 10x their current size? If the competitive product fails what will it cost to acquire Makerbot? $1B? $2B? Will it even be possible?
Looking at it from a pure engineering play it makes little sense, after all Stratsys could use the RepRap stuff and make their own RepRap clone right? But that only validates the market which invariably favors the market leader, in this case Makerbot.
So if you think 3D printing is going to be 'the big thing' in manufacturing going forward you're kind of stuck. Stratasys had to buy Makebot or risk losing to them.
I got to live through a very similar situation at Sun. When it got big enough DEC had a problem, do they buy the upcoming workstation vendor which was using commodity Microprocessors or try to kill it? DEC chose poorly and paid for it with their own existence which let Sun move into that spot until it died. I remember reading a great article when Sun posted a $1B in annual revenue and an analyst wrote "What would DEC do with a billion dollars?" Talking about the lost revenue because DEC was avoiding open systems and commodity hardware like the plague.
Trying to guess the future is hard, very hard, but I don't doubt for a moment that Stratsys has always had the goal that if one of these hobbyist 3D printing companies threatened to break out they would buy them before they couldn't afford it. Makerbot triggered that particular outcome by building a successful product.