Special Feature
Part of a ZDNet Special Feature: Digital Transformation: A CXO's Guide

Maker of Taser weapons goes digital, renames itself Axon in cloud platform bet

Axon is best known for its Taser electrical weapons for law enforcements, but new hires from GoPro and Tesla, as well as traction in its Axon body camera and cloud platform and Evidence.com, give it assets for digital transformation.

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Axon, formerly known as Taser and best known for its electrical weapons, is betting that it can become a cloud, analytics, and data company. Over time, Axon's cloud bet could pay off.

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Last week, Taser changed its name to Axon, which is the business unit that houses the company's body cameras and back-end evidence platform. Axon features HD body cameras and a cloud-based system that collects data from the hardware and stores it in a site called Evidence.com.

Evidence.com contains more than 6.5 petabytes of data including weapons data logs that are uploaded every 1.2 seconds.

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While Axon is certainly the better digital transformation tale to tell, the company's revenue is dominated by hardware, which accounted for $202.6 million of $268.2 million in 2016 sales. The Axon unit posted 2016 revenue of $65.6 million, up 85 percent from a year ago. Indeed, Axon as a company will be best known for its Taser weapons for the foreseeable future, but its cloud platform traction is real.

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Nevertheless, Rick Smith, CEO and co-founder of Axon, is betting on the cloud shift. In March, the company hired Kathy Trontell from Tesla to be chief information officer and Jason Hartford from GoPro to be the senior director of product management.

Smith said the hires will help Axon build out its platform and network.

To aid that build-out, Axon said it will provide free body cameras to every police officer in the US. Axon will also provide free hardware, software, data storage, training, and support to police departments for one year.

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Smith said Axon was going all-in on changing the workflows of law enforcement, collect impartial records of evidence and eliminate paperwork. Axon said it will also build out artificial intelligence and analytics as value-added services.

The Axon workflow goes like this:

  • Video collected from cameras is downloaded when the devices are docked for charging.
  • The data is managed in the cloud via Evidence.com. Information is shared and integrated across the systems. Users can also be managed.
  • Axon also has encryption, security and monitoring, and compliance certifications.

Like many large technology vendors, Axon is managing a shift from hardware to the cloud. In fact, recurring revenue from Taser can help fund Axon's expansion.

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What remains to be seen is whether Axon can make the cloud pivot without a few hiccups. Analysts have noted that police departments prefer to buy gear and software upfront due to budget limitations. In other words, the cloud pay-as-you-go model may not scale for police departments.

According to Oppenheimer analyst Andrew Uerkwitz, Axon's one-year deal could drive adoption, but ongoing costs may be an issue for law enforcement agencies.

He said in a research note:

"In a practical sense, we don't see much changing: 1) Already strong demand in body cameras/evidence management systems exists; 2) Procurement laws/regulations limit the impact free trials can have on contracts; 3) up front costs aren't a hindrance to adoption, ongoing yearly costs are the issue. We applaud Axon CEO and co-founder Rick Smith's efforts in jump starting his long-term vision, but see little impact to the numbers."

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