Partners: HP JetFusion 3-D Printing Launch Signals Start Of New Era For 3-D Channel Sales Growth

Partners say HP Inc.'s formal launch of its eagerly anticipated HP JetFusion 3-D printing solutions Tuesday heralds a new era of printer sales growth that is focused squarely on redefining the economics of the intensely competitive production manufacturing market.

TPM, the leading 3-D design technology company in the Southeast, expects what HP is calling the "world's first production-ready" 3-D printing system to be a catalyst that will help the company double its sales over the next five years.

"The long-term market opportunity is unbelievable," said Chris Fay, vice president of sales for Greenville, S.C.-based TPM, whose tagline is 'What will you create today?'

"This is going to turn 3-D printing into a significant portion of our business. Today, 3-D represents a single-digit percentage of our business. With HP entering this market, it could end up being 25 [percent to] 35 percent of our future sales."

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Among the reasons for Fay's optimism is the focus on quality, reliability and channel commitment that HP is bringing to the market as a printer market leader with a long history of innovation.

The new printers are sure to deliver production-quality manufacturing parts well below the price of competitive offerings at five to 10 times the speed of the current products, said Fay.

"This obviously drives down the price of manufacturing parts that you can produce at a lot higher speed and throughput," he said. "This is going to be substantially faster than anything else in the marketplace today."

Fay expects HP to take a leadership position in the market with the launch of the new products.

"There are no competitors even close to HP," he said.

HP’s new products include the HP JetFusion 3-D 4200 printer designed for short-term manufacturing needs and protoyping which is priced starting at about $160,000 and will be available in late 2016.

The 4200 will be followed by the HP JetFusion 3-D 3200 printer designed for prototyping, priced starting at $130,000 and available in 2017; and the HP JetFusion 3-D 3200 printer and processing station, priced starting at $155,000 and also available in 2017.

HP said the JetFusion 3-D printing solutions for the first time deliver "superior-quality physical parts at up to 10 times faster and at half the cost" of current 3-D printers. That is because HP is printing at the "individual voxel level – what HP calls the 3-D equivalent of a 2-D pixel in traditional printing."

The channel opportunity for the new printers is initially focused on fewer than 100 elite partners around the world with deep expertise in the 3-D manufacturing market.

HP refers to it as a "restricted" channel model that enables partners to capture all of the sales for that specific manufacturing customer from printer to materials sales and service and support related to production.

"Our channel partners will participate in all elements of the business," said HP 3-D Printing Business President Stephen Nigro. "They will participate in the hardware margins, the agent margins. They will participate in the materials margin, and they will participate in the service and support margin. What we are doing is creating a system unlike what we have done in our other businesses. If you are a channel partner and you sell that printer you by definition have the rights to everything else."

The HP 3-D printer channel model estimates partners will hit a break-even point after an 18-month period, said Nigro. "You can think of the business model as being almost 50 percent hardware and 50 percent aftermarket," he said. "So it is going to be a very attractive model that will build as you build your installed base."

An executive for one of the top 3-D technology companies in the U.S., who did not want to be identified for fear of alienating his current 3-D printing partners, said one of the reasons he is so excited about the HP 3-D printer launch is the focus on partner profitability.

"This could double or triple the size of my 3-D business if it hits the sweet spot of the 3-D manufacturing market like I think it will," he said. "You are talking about multiple machines within manufacturing companies and partner participation in the material and consumables market. It's a huge total new market opportunity with a long-term road map. Five years from now we are going to be doing things with this technology we haven't thought of yet. "

The top executive said he expects manufacturing customers to come up with new breakthrough applications that will forever change production manufacturing.

"Companies have been using manufacturing prototype technology for 25 years," said the executive. "HP is going after the production market. This is going to change the way we produce goods. It is going to be exciting to see how the manufacturing customers react to these new HP printers."

Ken Lamneck, CEO of Insight Enterprises, the national $5.4 billion solution provider behemoth that sits on HP Inc.'s Partner Advisory Board, said he is impressed by the vision, channel commitment and eventually scale that HP will bring to the 3-D printing business.

"It's exciting," he said. "HP is looking at this as a viable manufacturing platform. It's a very different channel than what exists [in the IT market] today. You are talking to engineering managers, not lines of business or IT. It is a very different business and one that we'll certainly look at going forward to see if it fits and makes sense."

Lamneck said he expects HP to scale the business dramatically over the next several years. "They are looking at bringing the Moore's Law economics to bear here," he said. "If larger-scale players want to look at this and make the investments, HP is certainly open to that. But there would definitely have to be some investments. It is not extending our printing group, as we know it today. That would be a huge mistake to think you could extend that group and play in the 3-D arena. It is a whole different business and set of clients you would be dealing with."