Taser International Inc., the maker of the device of the same name that police use to incapacitate someone temporarily, will now be known as Axon as it moves further into software.
Axon comes from the unit of Taser that sells body cameras used by police, cameras on patrol car dashboards and software that manages the many hours of digital footage the camera generate.
Gambling that police departments across the country will sign deal for paid subscription of software, the company has offered its body cameras free to officers as well as one year free access to Evidence.com, the online software that manages video and other types of evidence.
Stock at the company was down 0.5% after increasing over 6% leading up to the announcement by the company.
Taser still receives the vast majority of its revenue through weapons, which used an electrical current to stun and immobilize a subject. In 2016, out of $268.2 million in revenue, over $202.5 million came from sales of weapons, with most in the form of Taser replacement cartridges.
However, CEO Rick Smith says the brand name Taser is polarizing due to an association with the weapons sold by the company.
The weapons have become very popular amongst police, but are criticized by groups like the ACLU mainly due to deaths that Tasers have caused.
Taser will keep the Taser brand for weapons and accessories for them. Its Axon brand will allow the business to market its software for records management and cameras to police department that will not carry Taser, which can generate controversy.
Close to one quarter of the revenue Taser generates comes from its Axon segment. Revenue from software for its evidence.com was nearly doubled to over $11.7 million.
A research analyst in the industry said that hardware can create issues for police departments as they are creating multiple hours of data.
There is not only the question of storing the data for an industry not known traditionally to be tech savvy, but how to handle the digital evidence with safeguards that are equal to physical evidence.
The evidence.com software is sold by subscription, typically in contracts of five years. That means that Taser must spend money up front to sign up its customers while its revenue follows over the period of the signed contract.
Companies specializing in software such as Workday Inc. and Salesforce.com persuaded investors to accept that type of revenue model.
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