Long-Term 3D Industry Trends: Convergence of Hardware and Services



As Research Manager and 3D printing market analyst for Photizo Group, I recently released a new market intelligence report on 3D printer and additive manufacturing system manufacturers. During an analysis of several manufacturers’ annual results over time, I’m seeing an interesting and important trend beginning to emerge.

Growth drivers and business models for these companies have had to evolve over the years to accommodate the evolution in additive manufacturing technologies and subsequent increases in demand. Where two starkly contrasted go-to-market strategies once existed, today the professional 3D printing industry is seeing a blending of revenue drivers.

In a broad sense, there have been two predominant approaches to 3D printing, each of which can be traced back to the type of fabrication technology a particular manufacturer commercializes.

  • Highly complex, expensive additive technologies typically lend themselves to a “3D printing as a service” model, because historically it did not make sense for many customers to purchase a system and be trained in its proper use.
  • Less complex additive fabrication processes that can be packaged in a more accessible hardware unit to serve a broader prototyping or modeling function lend themselves to a hardware and consumables sales model. This type of model pursues maximum hardware placements to drive continuing revenue through consumables and support.


To this end, for years many manufacturers of 3D printers drove the majority of their revenue through one method or the other. Organizations such as 3D Systems and Stratasys sought to sell as many of their 3D printer products as possible. Meanwhile, others such as voxeljet and ExOne built businesses around the operation of service centers that house their own machines where the manufacturer makes parts for customers that cannot be made anywhere else.

After several years, today it is clear that these two business models are converging.

Hardware-centric manufacturers that operate on-demand parts services are seeing those services account for more of their annual revenue. Alternatively, service-centric manufacturers that specialize in high-end industrial additive manufacturing technology are now driving significantly more revenue from the direct sale of their machines to end customers. 

For example, although 3D Systems has traditionally been hardware-centric, the following chart from Photizo Group outlines the revenue directly accounted for by 3D Systems’ on-demand 3D printed parts service known as QuickParts.


3d 1


Notice that, since 2010, the percent of QuickParts revenue as a percent of total 3D Systems’ revenue has fluctuated some due to overall rapid company growth but overall has increased significantly through 2013. Additionally, total revenue has increased each year since the service launched. In 2013, revenue generated from QuickParts accounted for nearly 20 percent of total 3D Systems’ revenue, and this percentage is expected to grow in 2014 as 3D Systems has already made a sizeable acquisition to expand QuickParts into South America.

Stratasys, another hardware-centric manufacturer that opened an on-demand parts manufacturing service has only very recently shifted its focus to include more services capabilities. Historically, revenue from its services reporting segment has been relatively small (between ten and fifteen percent on average) and declining over the last three years. However, the recent purchase of Solid Concepts and Harvest Technologies should add an additional $60 to $100 million in annual revenue to the services segment in 2014, further establishing the convergence of the two models.

Now lets look at two Photizo Group charts that track services revenue from the traditionally service-centric providers voxeljet and ExOne. Clearly, growth of services in these companies has been outpaced by rapid growth in the direct sale of additive manufacturing systems.


3d 2


3d 3

The motivations for such a convergence likely vary from provider to provider. Additionally, not all vendors operate some type of 3D printed parts service. Some manufacturers of industrially focused high-end additive manufacturing systems prefer to operate in a hardware-centric manner (such as Arcam).

In some cases, 3D parts services can provide a consistent and more predictable stream of revenue where system sales may have a 6- to 12-month (or longer) sales cycle. Other manufacturers use global parts services as a way to build potential customers for hardware sales. After all, introducing end users to the benefits of 3D printing through custom parts is often more effective than selling a system directly to a new customer.

On the other hand, industrial additive manufacturing companies are capitalizing on the increased adoption of 3D printing technology in various markets such as the aerospace, automotive, and medical industries to rapidly grow revenue by selling more systems to end users. The market for 3D services is competitive, and growing services revenue for complex, short-run parts can be challenging. More system sales mean rapid revenue growth levels that likely could not be achieved by services alone.




Manufacturers of all kinds of 3D printers and additive manufacturing systems are now finding that a flexible approach to engaging end customers is beneficial. While many offerings will continue to be more specialized, it is no coincidence that publicly-traded manufacturers are focused on multi-faceted efforts to reach new customers in new ways.

Hardware-centric companies may be motivated to evolve business models in part by the eventual threat of reduced consumables margins as third-party material suppliers begin to emerge. Conversely, service-centric firms are facing increased competition on local and global levels, and those companies that manufacturer AM systems may now be focusing on direct sales to customers as a way to continue to grow revenue quickly.

Regardless of the motivation, the outcome and conclusion are the same: the 3D printing industry continues to be in a state of rapid growth, which is motivating leading firms to think about their businesses in new ways.


This article is derived from Photizo Group’s Professional 3D Printing Competitive Intelligence Report, which is available for purchase on the Photizo Group web store here. All inquiries should be directed to

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