Why is 3D Systems Acquiring Geomagic?

What I found confusing is the rationale to acquire another 3D-scanning software company less than three months after the Rapidform acquisition. In the scanning world, it has been a three-horse race for quite some time: Rapidform, Geomagic and InnovMetric. Why would 3D Systems want to own two of the top-three names?

Now, I’ve been expecting 3D Systems to make another acquisition in the 3D scanning space, but I was sure it would be a scanning hardware company. (I’m still confident it will buy a company that makes 3D scanners).

According to the press release, “…positions the company for accelerated growth in the fast-growing, 3D content-to-print space. The transaction adds complementary products and technology, increases the company’s reseller coverage globally…”

I’m not buying that.

First, the software isn’t complementary to Rapdiform. Geomagic and Rapidform have been going head-to-head in the battle to be recognized as the best tool for modeling from scan data. They are so similar that few companies routinely use both in the same facility or department. Second, there is a lot of overlap in the reseller channel. Unlike the 3D-printing space, many (most?) sell several brands. So, a Rapidform reseller may also be a Geomagic reseller.

As I mulled things over, I came up with some alternative motivations, but none were compelling.

• Blend the best of each into one software program.
  • While each has a unique approach and unique advantages, they are both robust, end-to-end solutions with no obvious capability gaps. Buying Geomagic to code one super app seems unnecessary and not that easy to do.
• A play to consolidate the scanning software market.
  • When there are only three major players, isn’t the market already consolidated? I’ve heard that three is the magic number for a maturing, yet growing market.
• Adding Ping Fu to the team.
  • Ping (founder and CEO of Geomagic) is a powerful force. She has notoriety around the globe; is recognized as an innovator and progressive thinker; and has long been a proponent of mass customization and empowering the individual. But does anyone buy a company to add one person to the executive team (Ping will be the Chief Strategy Officer)?
• Buying brand recognition.
  • True, Geomagic has the best brand recognition, but in a three-horse race, isn’t marketing a better answer?
• Geomagic is what they wanted all along.
  • Before the announcement of the Rapidform acquisition, Geomagic seemed to be the better fit. And 3D Systems already had a working relationship: the Kinect-to-3D Print App shown at last year’s CES (Consumer Electronics Show). There could be a kernel of truth in this thought.

In this message, two phrases popped out: “Sensable Group” and “haptic solutions.” Peppered in the message were two references to sculpting.

I completely forgot that Geomagic bought Sensable, the maker of the haptic input device for digital sculpting, modeling and design, until I read the message. My conclusion: 3D Systems wanted the Sensable technology, which is a very good fit in its “3D content-to-Print” strategy. And that technology includes a rather unique software modeling tool, Freeform.

If this is true (we may never know and I may be wrong), I wasn’t too far off with my earlier thought. 3D Systems acquired hardware for input (I thought it would be a scanner). And the deal is sweetened by some very good IP (intellectual property), brand recognition and charismatic and forward-thinking Ping Fu.

What are your thoughts?