Axon Enterprises. Not Just for Law Enforcement
This is going to be a short post on Axon’s new ambulance deal and why it is an example of the company’s developing moat. If you want a lengthier primer on why I love Axon as a long-term play, check out a post I did on the company two months ago here.
Axon Enterprises, the inventor of the Taser and other law enforcement technology, announced this week a partnership with an ambulance provider to connect its vehicles with in-car video technology.
Here is a long quote from the press release:
“Axon (Nasdaq: AAXN), the global leader in connected public safety technologies, today announced that Cypress Creek Emergency Medical Services (EMS), a 9-1-1 EMS provider in North Harris County, Texas, will deploy 37 Axon Fleet 2 in-car video systems across the agency’s emergency service vehicles. Each in-car video system includes a forward-facing and rear-facing camera and is backed by the digital evidence management system, Axon Evidence (Evidence.com). This order was received in the fourth quarter of 2019 and will ship in multiple phases.”
There are two things I like about this deal. One is that Axon is expanding its addressable market from law enforcement to all public safety agencies. According to a 2011 report, there are over 21,000 local EMS agencies just in the U.S. That is a HUGE opportunity for them to go after.
The second and more important tidbit is the fact these video systems will be backed up on Evidence.com. This is a clear example of Axon’s recurring revenue bundle at work, and how they separate themselves from the competition. Streamlining all of this technology into one subscription is a tremendous value proposition, and the main reason I think they are developing a strong economic moat.
To close out, here is one out of the money prediction: in 5-10 years there will be Salesforce-like specialists in many local safety departments to run Axon’s software. This will further develop Axon’s moat by creating an entire ecosystem dependent on their technology.
Disclosure: The author is not a financial advisor, and may have an interest in the companies discussed.