Mostly Noise but Spot the Trends – Reports on Additive Manufacturing

2020-11-04

Lee-Bath Nelson  

detail from BASF booth at FN 2019 report photo by Tessa Blokland

Like many, I have a few Google alerts set that generate daily reports to my email. Most of the alerts that get sent end up being market reports on some aspect of Additive Manufacturing (AM) that is offered for sale. This got me thinking on the value of various market reports. First, there are several different kinds of reports. Secondly, it seems that different reports are aimed at different audiences. In my past, I was a heavy consumer of reports on various industries and I’ve come to learn that there is a wide variance in quality among reports and it mostly has to do with the experience and expertise of the author and occasionally the organization they belong to. Some reports, prepared by serious analysts and AM experts can be extremely valuable while others can be misleading at best. Here are some thoughts on various kinds of reports and what we can learn from them.

The Veteran

The most veteran, and arguably most varied report is the one issued by Wohlers Associates once a year, usually in the March-April time frame. Terry Wohlers has been issuing a report on the 3D Printing and Additive Manufacturing industries for well over 20 years and has probably seen more printers and 3D printing technologies than most industry veterans ever will. The Wohlers report is a thick (now digital) volume that includes a lot of background material that is missing in many reports. This report outlines and explains 3D printing technologies and also major companies in the AM ecosystem. The report traditionally focused on machines and materials but in recent years has given more room to software solutions and DfAM – Design for Additive Manufacturing. This is in synch with industry trends, especially where software is concerned. The annual report also include a lot of geographic information and anecdotal as well as statistical information gathered through a poll of service providers. In 2019’s report, for example, they polled 127 service providers in 29 countries and they even give the geographical distribution of those service providers. The anecdotal comments as well as pie charts of which machines they expect to buy etc are useful, but they would be more useful if we had a sense of the size distribution of the service providers themselves. A service provider like Citim/Oerlikon is very different from a small local service provider offering only desktop FDM service. Without this info the survey results are harder to interpret. In the projection department, the main projections are for machine sales, materials, and services sold. This is lacking – see the last part for my more specific plea, especially from a well-connected group like Wohlers. Because of Wohlers’ connections, they are able to report historical machine quantities sold by vendor – a very unique data set that can be useful for some companies.

The Analysts

There are several veteran analysis companies such as Bloomberg, Gartner, IDC, and IDTechEx that have covered the additive manufacturing industry for a while now. Their reports are not always projections of the industry and individual company financials but also reports highlighting interesting companies and technologies for their customers. I can say from experience that these analysts are very serious and take the time to understand market trends to see what is relevant and interesting as well as individual companies – they typically ask me very poignant questions about LEO Lane before releasing their reports (and in IDC’s case choosing LEO Lane as IDC Innovator in 2019). Occasionally, these firms also host webinars on select topics they think are timely and worth explaining, as Johnson Imode at Bloomberg Intelligence did a few months ago when AM was becoming very topical for clients due to COVID-19.

Quite recently there have been some analyst movements: Pete Basiliere, the veteran Gartner analyst retired and as far as I know has not been replaced yet at Gartner. For those who will miss Pete, as I often do, he is doing his own thing at the aptly named Monadnock Insights providing custom consulting to companies. Even more recently, Marianne D’Aquila moved from IDC to ARC advisory. IDC still has several excellent Additive Manufacturing analysts such as Julio Vial and maybe this will deepen ARC’s coverage of AM – their last report was more than a year ago (authored by Fabian Wanke and Will Hastings, who has since moved to PTC).

These reports are full of trends and data but typically they are only available to those subscribing to the firm’s services and that subscription sometimes comes with a hefty price tag. Some analysts do have openly available blogs with some of their research findings and all firms offer customized services for specific companies and their niche needs. IDC even, at some point, had a use case data base of many AM applications and their volumes in some specific cases. From this database they could customize a subset depending on their customers’ interests. Again, with this kind of access, I have a plea at the end.

Chart from 3Dhubs 2020 trends report

The Players

Ecosystem players also issue their own reports from data they have gathered through surveys (mostly of their customers but occasionally beyond). One example of this type that has been published for several years is the state of 3D printing report authored by Sculpteo (now part of BASF’s Forward AM). This year the report was published in June, mid COVID-19 but didn’t include much of the effects of the pandemic because of the timing of the survey. The Sculpteo survey is an interesting read but needs to be read in context. It had over 1500 respondents, a large number, with varied usages – over 40% percent use 3D printing only as a hobby or for their studies. This is influencing the results quite a bit and unsurprisingly, in this context, most of the respondents use 3D printing for prototyping or proof of concept. Over 40% spent less than $10k a year on 3D printing. The industries that are heavy AM in production users represent only about 30% of respondents and a similar % spent over $100k a year on AM. It would have been great to see the results split for those 2 groups. Instead, Sculpteo single out only users that have more than 2 years’ experience and spend $10k or more a year – they call them Power Users and they show some interesting differences between them and all users combined (rather than the rest of the users, which might be a better comparison – depending on the percentage of power users).

3D hubs also publishes an annual trends report, this year it was published in January but everything changed shortly thereafter – will be interesting to see the 2021 report. What I really like about the 3D hubs reports (both for this year and the previous one) is the overview by quarter of hot media topics – its’ nice to look back and remember. The report also includes a lot of statistical analysis but it is based on activity at 3D hubs and so, again, an analysis of the source of data is warranted before using the reported results. In comparing the 2019 report (published in January 2020, chart from it above) and the 2018 report we can see that the volume of parts on 3Dhubs decreased from over 750k in 2018 to over 550k in 2019, yet 3D hubs reports that the overall value of the parts ordered grew in 2019 over 300%! This again, raises my pet peeve of measuring value in our market – more on this below.

Other ecosystem players such as Ultimaker and AM Power (a consultancy company) also published interesting reports – AM Power has an especially interesting one on COVID-19’s expected effects as well as reports on Metal AM that were commissioned by their customers. Alternatively, you can purchase a more general report by AM Power. Other analysts and consultants offer customized reports to those companies that wish to commission one.

In summary, when using a report from a company in the ecosystem, it is good to keep in mind the area where that company is operating both geographically and in terms of industries and usages. These considerations are likely to affect the data available for the report and therefore the reported results. Having said that, a lot of interesting and worthwhile information is often included in these reports – well worth the read and you can’t beat the price.

The Me-Toos

There are some companies who publish market reports on many many markets, not just additive manufacturing, and do not have specialist analysts for each market. If one part of a market gets more attention they will generate a report for that part on its own – a recent example is metal AM. These reports usually follow a similar format and offer projections for the market as a whole as well as revenue and other data and projections about companies in the industry, both public (that data is available) and private (that data is presumably only available by talking with the company or if the company published it). Many of these reports remind me of those automatically generated reports for sale on various publicly traded companies. An algorithm takes data from other sources (freely available or paid) about the company and puts it through some checks and calculations and then generates a uniform report with a technical financial analysis of the company. Sometimes a person will go over the report for a sanity check. In periods, like the 1990s, when technical trading was popular there was quite a bit of demand for these reports. But there is little useful information in these types of generic reports. Understanding the business underlying the different stocks has been proven to be important to smart investing, especially long term investing. I believe the same applies to these market reports: you really have to know the market and the companies you write about to be able to produce a worthy analyst report. At a minimum you need to communicate with the companies you are reporting on and fact check your data with them. I know this is often not the case. In this case caveat emptor is right – buyer beware, before you spend your money.

detail of BASF material FN 2019 photo by Tessa Blokland

The Gaping Hole

Now we get to my pet peeve: the one thing in common for all the great analyst reports I mentioned is that they focus their report on the market size of 3D printer sales, 3D printing materials, 3D printing services, and more recently software for the AM process. What I would really love to see is the current and projected value of 3D printed items! When analysts report on the manufacturing market, they don’t measure it by the revenues of manufacturing equipment providers or by raw materials consumed or even by the revenues of contract manufacturers. They report and project the value of goods manufactured. AM is an aspiring manufacturing technology and, as such, industry analysts would do well to report the value of items produced and offer forward projections of this value. It is not an easy task, but analysts with strong industry ties (such as Terry Wohlers and others) have a great chance to produce a different kind of report that will be uniquely useful and valuable for the entire additive manufacturing industry. <getting off my soapbox now>

For more insights and information follow us on LinkedIn or subscribe to our newsletter for weekly updates. Top and bottom pics are by Tessa Blokland from the BASF/Forward AM at FormNext 2019.

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