| SAN FRANCISCO, April 5
SAN FRANCISCO, April 5 TASER International, the
maker of electrical weapons for police officers, is changing its
name to Axon as it pushes further into the software business.
The Axon name comes from the business unit that sells police
body cameras, patrol car cameras and the software for managing
the hours of digital footage they generate.
In a gamble that police departments will sign up for paid
software subscriptions, the company is offering a free body
camera to police officers in addition to a year of free access
to Evidence.com, its online software for managing video and
TASER still gets the bulk of its revenue from selling its
weapons, which use electrical current to immobilize targets.
Last year, $202.6 million of its $268.2 million in revenue came
from its weapons segment, mostly in the form of replacement
But nearly a quarter of TASER's revenue now comes from the
Axon segment. Software revenue for Evidence.com nearly doubled
to $11.7 million.
"The hardware creates an issue for police departments in a
sense that you're creating hours and hours of raw data," said
Steve Dyer, senior research analyst for Craig-Hallum Capital
Group. "You have the question not only of how to store the data
in an industry that is not traditionally that tech savvy, but
also how to handle digital evidence with the same safeguards as
Evidence.com software is sold on a subscription basis,
typically five-year contracts. That means TASER would have to
spend money to sign up the customer, but revenue would trickle
in over a number of years.
Software firms like Salesforce.com or Workday have persuaded
investors to tolerate this revenue model. But it can cut into
profits in the short term: TASER's profits dipped from $19.9
million to $17.2 million last year despite strong revenue
"Once an agency has been on board with Evidence.com for five
years, we think the churn rate will be quite low," CEO Rick
Smith told Reuters.
TASER only started selling software in earnest in 2012, so
there is still little data to support Smith's assertion.
Meantime, the company is working to add features: it acquired an
artificial intelligence startup called Dextro this year,
providing technology that helps police search and redact
Dyer said TASER had a virtual monopoly on electric weapons
and had already sold body cameras to most of the big police
departments that have made a decision on the technology.
"It's a bet on whether they can turn this captive audience
and first-mover advantage into a software and services revenue
stream down the road," he said.
(Reporting by Stephen Nellis; Editing by Jonathan Weber and