In the following video, 3D printing specialist Steve Heller and industrials analyst Blake Bos discuss Proto Labs (NYSE:PRLB) and Stratasys (NASDAQ:SSYS) in the context of being expertise providers, which can help them differentiate in a sea of increasing competition.

The 3D printing industry is expected to grow by more than 31% per year, compounded, between 2013 and 2020, which will likely invite new competition hoping to capitalize on the industry's tremendous potential. As often is the case with increased competition, it's likely to put pricing pressures on competing 3D printers, which may be great for end users and overall adoption rates, but could prove to be challenging for 3D printer stocks seeking to maintain their profitability.

One way a 3D printing stock could differentiate itself from others is to become an expertise provider by offering 3D printing-related services -- like a Kinko's for 3D printing. Given the current talent shortage the entire 3D printing industry is experiencing, it's likely 3D printing expertise continues to command a premium, even in the face of increased competition. In other words, 3D printing stocks that build out their service offerings to represent a more significant portion of their revenue may be better equipped to mitigate the threat of potential product commoditization.

Although Proto Labs is primarily a rapid manufacturing service provider, its recent entrance into the 3D printing space through its FineLine acquisition expanded the company's capabilities to now take customers' products from early-stage 3D-printed conceptual models to manufacturing runs in excess of 10,000 units. Because Proto Labs doesn't actually sell any 3D printers, it's essentially a pure-play investment for gaining exposure to 3D printing and rapid manufacturing-related services, and could be a good candidate for remaining insulated from the threat of 3D printer pricing pressures.

Stratasys recently acquired Solid Concepts, a leading 3D printing service provider focused on manufacturing-related 3D printing applications, in a move aimed at bolstering its 3D printing expertise. Solid Concepts made quite the stir when it produced the world's first fully functional metal 3D-printed handgun in order to prove to potential customers that 3D printing is a highly capable technology. Last quarter, Stratasys' services generated nearly $24.4 million in revenue, or about 13.6% of Stratasys' total revenue. Although Stratasys has been making strides to bolster its 3D printing expertise, its services revenue may not currently represent a large enough percentage of its total revenue to mitigate any serious pricing pressures issues on its 3D printers.

Going forward, investors should acknowledge that while providing 3D printing-related services could help a 3D printing stock mitigate the risk that product commoditization poses, it isn't a guarantee that a service-oriented approach would allow them to successfully navigate these potential challenges.      

A full transcript follows the video.

Blake Bos: Some other big names we talked to that had some exciting news, Proto Labs -- we interviewed some folks over at their new acquisition, FineLine, and we learned a lot about service bureaus here that seemed really exciting. That seemed like a very interesting play that might require further research.

Steve Heller: I own Proto Labs. I'm a big fan of the company. I may be a little bit biased here, but what I like about Proto Labs is it seems that the 3D printing industry is moving more and more toward services, and less focused on products. It seems that all the products are pretty much the same, overall.

Bos: It's getting some commoditization. Margins might compress.

Heller: Right, so where's the value? The value's in the expertise. Who has the expertise? Who's the pure play in expertise right now in manufacturing -- rapid manufacturing? It's Proto Labs.

Bos: Yes, definitely.

Heller: They just acquired a 3D printing service provider, FineLine, and that allows, now, their product to go from a conceptual model to an actual manufacturing run where they could produce tens of thousands of parts for the same customer. That is a huge supply chain and value chain one company focused on.

Another company I'm really excited about in terms of the servicing side is Stratasys, with their recent Solid Concepts acquisition.

Bos: Now they have RedEye and Solid Concepts.

Heller: Right. They're going to merge it together, go under the RedEye brand. Solid Concepts, though, have been in business since 1991 producing 3D-printed manufactured parts, so they have so much expertise around the product.

As a long-term business risk, I think the risk is definitely pricing pressure. Since there's more and more supply of 3D printers on the market, more competitors, prices are going to decline, profit margins are going to take a hit.

The way to mitigate that is through providing services through expertise, and since there is currently a talent...

Bos: A big talent shortage.

Heller: Yes, there's a huge shortage of expertise right now in the industry. Securing that talent early on, before it becomes really apparent to all the industry players, is very important.

Proto Labs, put it on your watchlist, folks. Stratasys, definitely give it another look.

Blake Bos owns shares of Apple. Steve Heller owns shares of Apple and Proto Labs. The Motley Fool recommends and owns shares of Apple, Proto Labs, and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.