'Making' Is the Biggest Tech Merger Ever
NEW YORK (TheStreet) -- Technologies merge all the time. Clouds are a merger of distributed computing and virtualization. Tablets are a merger of laptops and phones.
But there are bigger technology mergers on the horizon in this decade. The biggest may be the coming merger of computing with manufacturing.
Chris Anderson, perhaps the best tech writer of my generation, recently quit the scene to join a start-up, 3D Robotics, which he told The Atlantic is at the center of all this. He calls it a "natural outgrowth" of the "maker" movement he began covering five years ago.
For investors, that movement may be a mystery, but it's simply this: Instead of producing virtual goods from computers, makers produce real goods. "Making" is where personal computing itself was 40 years ago, a hobbyist niche looking to become a mass movement.Think of 3-D printers as being the computers of this new movement. Companies including 3D Systems (DDD) and Stratasys (SSYS) are what Intel (INTC)and Texas Instruments (TXN) were at that time, and their printers are at roughly where the Intel 4004 chip was then . Their best printers are capable of creating dental implants from wax molds or aeronautics parts from metals. Hewlett-Packard (HPQ) had a private labeling deal with Stratasys but ended it amid speculation it would get into this business on its own. General Electric (GE) recently bought two high-end 3-D printing outfits, Morris Technologies and RQM, through its aviation unit, as 3Ders, which you might call the Datamation magazine of this field, recently reported. Both 3D Systems and Stratasys have been great investments over the last few years. There are short-term worries about 3D Systems, Seeking Alpha writes, which is increasingly going to court to protect its niche. Those will work themselves out. The uptrend in Stratasys seems more secure, as it seems to have a better handle on differences between the prototyping and production areas of the business, but both companies should do well. The real excitement is on the low end, with start-ups like MakerBot, which is based in Brooklyn, N.Y. The company deliberately focuses on the consumer market, producing both hardware and software, encouraging the growth of the hobbyist market and doing demonstrations such as a 3-D "photo booth" that produces small sculptures of your head from a photograph. Its Replicator 2 can turn plastic filament into finely detailed parts for about $2,200. Think of these, however, as being like HP calculators back in the day. They're cool, and if you're a college student or an engineer you're going to be jazzed. Events like the Maker Faire have the vibe of the old West Coast Computer Faires from the 1970s, complete with young long-haired geeks speaking a language their parents don't understand. It's from this cohort that the big breakthrough will come. We're still awaiting the Apple II or the Radio Shack TRS-80 of the maker revolution. Something and someone, in the next few years, is going to transform 3-D printing from a niche market into a mass market, into something every business has to have in-house and every family will want to own. Vast new markets in software, materials and products will result from that. What Anderson's adventure is pointing to, however, is something even bigger. That is, the merger of making with motors. 3D Robotics is in the business of build-your-own drones, smaller versions of the war machines that have transformed the war against al-Qaeda from a defensive struggle to an offensive one. But that's just the tip of the iceberg. Where it all leads is unknown, and that's the most exciting place for any business to be, at the bleeding edge. It's enough to make a great writer put down his pen. At the time of publication, the author had positions in INTC and GE. Follow @DanaBlankenhorn This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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