Good day, ladies and gentlemen, and welcome to the TASER International Inc. conference call. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance, please press star then zero on your touchtone telephone. I will now turn the call over to your host, Rick Smith, CEO. Please go ahead.
Thank you, and good morning to everyone. Before we get started, I'm gonna turn the call over to Dan Behrendt, our CFO, to read the Safe Harbor statement.
Thank you. Statements made on today's call will include forward-looking statements, including statements regarding our expectations, beliefs, intentions, or strategies regarding the future. We intend that such forward-looking statements be subject to the safe harbor provided by the Private Securities Litigation Reform Act of 1995. The forward-looking information is based upon current information and expectations regarding TASER International, Incorporated. These estimates and statements speak only as to the date they are made, are not guarantees of future performance, and involve certain risks, uncertainties, and assumptions that are difficult to predict. All forward-looking statements that are made on today's call are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are discussed in our press release we issued today and in greater detail in our annual report on Form 10-K for the year ended December 31, 2012, under the caption Risk Factors. You may find both these filings, as well as our other SEC filings on our website at www.taser.com.
Great. Thank you, Dan. We're hosting this investor call today to walk you through some rather exciting changes to our business model that we announced last Thursday for our Axon Flex and Axon Body on-officer cameras and Evidence.com, our digital evidence management service. For those of you who are following us on Twitter, our investor relations feed is @taser_ir. So that's at sign T-A-S-E-R underscore I-R on Twitter, and we will be tweeting out some graphics to illustrate our pricing model as we move through the call today. So if you haven't signed up, please do, and you'll be able to see the visualizations that will sort of help tell the story visually as we describe it here on the call. So we're now seeing broad acceptance of the concept of on-officer video. In fact, the Police Executive Research Forum, or PERF, which is one of the leading think tanks in this industry, recently hosted a 2-day conference in September dedicated solely to this topic of on-officer video. The general theme of the conference attendees, including many of the leading police chiefs in law enforcement, was that they believe on-officer videos will be standard equipment within the next 5-10 years. Given this rapidly spreading acceptance, we asked ourselves: How do we accelerate this? Rather than 5-10 years, can we bring it down to something like 1-2 years? Seeing that the market is rapidly accepting the concept of on-officer video, our strategy must be to accelerate adoption and to consolidate the market as rapidly as possible onto our platform to avoid market fragmentation. Our new pricing model was designed in extensive consultation with our customers over the past six months. We previously were using a fairly complex pricing model, which required custom quotes and negotiation with every customer. This allowed us to experiment and to iterate around pricing while we dialed in what we believed would be an optimal pricing model to scale the business. We now believe that we've refined our business model, and so we've now published this new pricing model to enable faster market adoption. The new pricing model is designed to accelerate our overall sales process in four key ways. Number one, by eliminating friction within the sales process. Number two, by eliminating any perception that our products or services are expensive. Number three, eliminating any sense of uncertainty in our customers about future costs. Number four, creating tiers of service that fit different customer segments that will allow us to both maximize penetration and profitability. I'm now gonna go into a little more detail about these factors. Let's start with number one. Our new pricing model reduces friction in the sales process by eliminating the need for negotiating with each customer. Until now, we felt it was prudent to maintain the flexibility of negotiating deals on a case-by-case basis. This enabled us to experiment and learn from our customers about their needs and their cost sensitivities. We believe this was absolutely the right strategy in the formative stages of creating a new market. However, we now believe that we've learned what we need to learn, and we've developed a formal pricing structure that can be released to the marketplace. This new pricing model is transparent, with several tiers of service and structured discounts based on volume. This allows the customer to self-service the level of service versus their budget. In other words, we believe this new pricing model is far more scalable and reduces the manual intervention and the back and forth in our sales process. Number two, eliminating the perception that our products are expensive. If you recall the graph, and we'll tweet it out now, that shows how the overall market space for on-officer video and price versus features, you'll see in the graph that we're making a strategic play to capture the majority of the market share in the on-officer video space. We believe we have the best product suites, and they're now at the most competitive prices, which allows us to solidify our position as the market leader in on-officer video by selling the most, by selling the most cameras and selling them profitably. We're confident that this move will ensure the largest possible market size for our subscription software business, which is where we see an even larger market opportunity. Because we previously bundled our hardware with a year of the Evidence.com service, our customers were comparing apples to oranges. They would compare our price to the price of competitors that were offering a hardware-only solution. By debundling the service, our customers can now compare the price of our hardware, the hardware only, to the marketplace of other hardware vendors. This allows us to significantly decrease the hardware price to a level far below where most of our competitors sit in the $700-$900 range. Over the past year, we've set a high value of our products being priced at $950. And now by reducing the price of our Flex unit to under $500 and our body cam at under $300, we're clearly the price leader in the space of law enforcement-grade cameras. And we believe the combination of having the best product at the lowest price is a clear winner that should position us for faster sales wins. Now, the third factor, eliminating customer uncertainty. Because our prior model was based on individual negotiation, we learned that customers were uncomfortable with uncertainty about future costs. They would ask questions like, "Well, what happens after the free year? And is TASER going to take advantage of me once I'm on this system?" So these were typical questions that require a lot of discussion and handholding with the customer. With our clear, transparent pricing model, this uncertainty disappears, something our customers have told us is very important to them. And then the fourth factor, creating tiers of service for different customer segments. Well, we previously only had one tier of service, so the only real way to deal with more price-sensitive customers was through negotiation. Yet, how could we make sure we're being fair to all of our customers? This meant that we were missing an important segment of the market for those most cost-sensitive agencies who were not sure that they would need the advanced features of Evidence.com. So now we have a segmented product and service offering that allows us to offer best-in-class products and services to the most price-sensitive segments, while also offering more advanced features and services to more sophisticated users. We believe this is a powerful one-two punch. The lowest price tier will drive volume, bringing on more users who historically may not have been good candidates for our full-featured service. And for more sophisticated users, we now have premium services which offer even better value for the customer while driving increased profitability and revenue for the company. So a customer can start out as low as $9.95 per user per month, plus storage they would have to purchase. However, for $49 a month, agencies can now get the full power of Evidence.com, with advanced features like external sharing, redaction, advanced workflows, along with a breakthrough service plan. We provide not only a full warranty with on-site spare parts, but we automatically upgrade our customers' cameras every 2.5-3 years. This was a hugely popular option we developed in close consultation with our customers. So many of our customers are loath to commit to purchasing a new technology because they know technology is fast advancing, and they're somewhat afraid that their equipment will become out of date. On our $49 service plan, this risk goes away. The customer never has to go back to the city council for a new capital equipment purchase. Every 2.5-3 years, we show up, the customer picks any camera from our lineup, and we replace all their gear. If the customer goes year to year, we'll upgrade them every third year. If they sign up for a five-year contract, we upgrade them once at two and a half years and again at five years, so there is an incentive for customers to commit to longer contracts. So it should be obvious, the net total revenue per customer will go up significantly for customers who select this ultimate service offering, and the net value for customers goes up significantly as well. It's a real win-win. The outcome of the pricing restructure is that we now have two of the most full-featured cameras in the market at the lowest prices available. And as we've said in the past, we feel strongly that we need to be proactive in our approach to this market, and our goal is to capture as much of this market share as possible in order to avoid fragmentation. For investors, we're still very comfortable with the figures we presented at our March 2013 Analyst Day for our 2017 goals for the video business. In fact, excuse me, we're hopeful this new business model will accelerate our business in getting there. At this point, I'm now going to hand over to Dan to walk you through the pricing figures in more detail.
Thanks, Rick. I'm gonna walk through the comparison of the new pricing versus the old pricing and how that affects the margins in the video business. So historically, although the retail price of the Flex, Axon Flex unit was $950, the average selling price was closer to $750, and Evidence.com was free for the first year with the purchase of the Flex. For revenue recognition purposes, we had to ascribe value to the service and storage, allocating roughly half of the $750 to Evidence.com storage and service, which was then recognized ratably over the year. The remaining amount was ascribed to the hardware, and that was recognized closer to $375. So out of the $750, roughly half would be recognized over a year, the other half would be recognized at selling. As you can see with the two-week graphic, we just sent out, assuming a 10% discount on the new pricing, the hardware revenue at selling is actually more favorable at $450 under the new pricing model. So the customer gets a lower hardware-only price, but a recognized revenue is actually improving by the debundling. If you look at the first year of Evidence.com, revenue combined with hardware, the picture is even more favorable. Under the old model, the customer was about $750 in total. Under the new model, a price-sensitive customer could buy a body camera for an ASP of $275 with a discount and a basic service with storage of about $200. So the customer sees a net savings of about $275, as they now pay $475 versus the $750. However, a more sophisticated high-performance customer will actually generate upwards of $1,129 in revenue in the first year if—if they opt for the higher-end Flex camera and the Ultimate Service Plan. Now, there's a little bit of apples and oranges here because the Ultimate Service Plan includes hardware upgrades every 2.5-3 years, in addition to software licenses and services. But based on our experience with TASER weapons in the field, we believe this is a much faster upgrade cycle than would occur naturally for customers who are not on the plan. Hence, from an overall revenue standpoint, the Ultimate Plan is a significant revenue accelerator. And even with the revenue deferral for the built-in camera upgrade every 2.5-3 years, the recognized revenue will be near the top of the previous range of recognized revenue each year. At the time of renewal, the range of prices for Evidence.com was about $125-$600 per camera per year, which includes the purchase of annual storage. That variance is due to a couple of factors. First, the very, very early adopters in the system in early 2012 received aggressive pricing discounts.... Second, the amount of storage needed by customers vary greatly, and the storage is paid up for upfront. For example, a customer records 10 videos per day, per officer and has a zero deletion policy, is going to need much more storage than a small agency that regularly deletes unneeded videos. Now that the pricing is unbundled, customers must choose whether to purchase the service at the time of the hardware purchase rather than receiving the full year free with the purchase of the hardware. Under the new pricing structure, we now offer different levels of service to purchase, whereas previously, licenses were only offered at the same level of service and functionality. In the press release, we saw that we had a starting price of $9.95 per month per license. This only includes the first 5 GB of storage. The starting point of the licenses at $9.95 only affords basic capabilities in our system, such as uploading and viewing videos with basic management tools. The standard license is $25 per month per license and offers collaboration tools and other administrative functions. Then there's the Pro license at $39 per month per license, which has even greater capabilities and analytical feature sets. Finally, agencies can purchase the ultimate license for $49 a month per license, which includes the hardware upgrade every 2.5-3 years, and a full hardware warranty, including on-site spares and advanced support services. In addition, the previous license model was on the camera, the new license model is at the user level. As a result, we expect that the number of paid subscriptions will actually go up with the new pricing model. In all cases, the number of licenses must be equal to or greater than the number of devices they're uploading into Evidence.com each month. The service license fees will be the highest margin part of the business, with variable gross margins of approximately 80%. Each of the license fee tiers will require purchases of additional storage. We anticipate storage to be average between $80 and $150 per camera per year. So with the storage plus the license fee, we anticipate the annual service price per camera to range in the $200 to $750, in addition to the initial hardware purchase. The same volume discounts will apply to the service offering, so the realized price will likely be roughly 10% less than the list price on average. On a consolidated basis, we expect that Axon and Evidence.com hardware products will have margins in the 10%-25% range, depending on the volume discounts that agencies are afforded. So if we get all huge agencies, buying large amounts of cameras, we'll see, you know, higher levels of discount, and we'll be sort of at the lower end of that range. Now, we don't necessarily view that as a negative because we wanna capture as much market share as quickly as possible right now. And given that cloud storage is an existing product in the market, we need to charge market rates for storage. Because agencies are prepaying storage, we'll be charging prices similar to what Amazon Web Services list price for storage, but we'll have the advantage of higher volume discounts, and we expect that with that, the storage margins will be in the sort of 20%-30% range over time. So as you model the video business, we'll have a hardware component at 10%-25% variable gross margins, a storage component with variable gross margins of 20%-30%, and a highly profitable service license component with variable gross margins of approximately 80%. So in conclusion, with the introduction of the new simplified pricing structure, we don't expect there to be a material change in the economic impact of TASER, and we've made very comfortable with the 2017 range of outcomes for our video segment. With that, I'd like to turn the call over to Jason Droege, our President of Evidence.com, who's going through the market expectations as well as initial reactions to the announcement by our customers.
Thanks, Dan. Our goal with Evidence.com and Axon is to be the first choice for any agency looking for on-officer video capability. This means having the best product at the best price, both of which we now have. Our market is highly fragmented, and while the bulk of officers are in the top 1,000 agencies, it's important for us to structure our pricing model to address the top and bottom end. Because the cost to activate new customers is so low, it's common practice for cloud providers to leverage entry-level pricing with a limited feature set as a way to speed adoption and address the lower, more fragmented end of the market. Our previous Evidence.com pricing only had one paid tier of service. Now we have four paid tiers of service. This allows our customers the flexibility to only buy the capability they need and spend less time negotiating. We do feel that the majority of the market will, at least initially, purchase either the basic license fee at $9.95, which is our leader special, or the standard license at $25, until they gain a full understanding of the benefits of the additional capabilities with the growth of their digital evidence base. Once a customer is on Evidence.com, we are then able to move them up the pricing curve to more advanced features. So a basic customer today could easily become a pro user next year. New product development will be focused on features in these higher pricing tiers. These pricing changes also position us for adoption of Evidence.com without Axon. While our sweet spot today is an amazing integrated experience around on-officer cameras and cloud software, Evidence.com can manage any kind of digital data. Our Evidence Mobile, Android, and iOS applications take photos, record audio and video with all the security and auditability our customers need. Agencies have also started to upload their video from interview rooms, in-car camera server systems, and legacy crime scene photos. I think we should expect to see the differences in the purchasing trends between the sizes of agencies as well. Large agencies will likely need advanced sharing and administrative functions at the onset of their program, whereas smaller agencies can likely get started with a basic or standard license. Anecdotally, the response thus far from customers has been very positive. Our customers appreciate the ability to pick and choose based on their needs. We look forward to sharing specific stories with you during the third quarter earnings call, next quarter. Rick?
Hey Jason, before we move to the Q and A portion of the call, I'd like to discuss how we're repositioning our video segment of the business under the Evidence.com brand. So it's now the Evidence.com business unit. Those of you who've followed our progress over the past few years realize the important play here is not a video camera play. We're using on-officer video as the entry point to build a cloud-hosted enterprise software ecosystem for the public safety market. Cloud services is a highly scalable business opportunity, and it will enable us to expand from our initial service offering, focused on managing digital evidence and video, into an ecosystem of hosted services across a variety of public safety applications. Today, there are significant markets for traditional record management systems, computer-aided dispatch systems, information sharing systems between agencies, electronic ticketing systems, automated license plate recognition systems, and more in this $20 billion annual spend market for technology purchases by public safety agencies. As Evidence.com scales as the first major cloud-hosted law enforcement application, we believe there will be numerous exciting opportunities to build, buy, or partner to deploy additional services on our platform, creating breakthrough value for both our customers and our shareholders. To help clarify our brand strategy, we again will be renaming our video segment in our segmented P&L into our Evidence.com business unit. It will still include both the software and hardware sensors that are part of the Evidence.com ecosystem, including TASER Cam, the Axon wearable cameras, and future products and services. In other words, we're focusing our business operations around our core brands. Doug Flint is the President of our TASER business unit, the world leader in safer weapon systems, and we recently promoted Jason Droege to the President of our Evidence.com business unit, a fast-growing leader in advanced cloud-based public safety applications and wearable sensors. We hope this clarifies the financial impact to the company of the refined pricing model. We feel that this is the best way to accelerate market adoption and acceptance of this truly innovative and exciting technology. So in case we haven't made this clear, we're- we are out to own this space and to grow it fast. We continue to hear positive conversations regarding how video has positively impacted agencies and their police officers, and we think that widespread adoption will not only benefit our customers, but the community at large. With that, we'll open up the lines to take a few questions.
Thank you. Ladies and gentlemen, to ask a question, please press star then one on your touchtone telephone. If your question has been answered and you wish to remove yourself from the queue, you may press the pound key. Our first question comes from Steve Dyer with Craig-Hallum. Your line is open.
Good morning, guys.
Morning, Rick, Jason.
I am not technologically advanced enough to see your market share data that you had talked about. Could you kind of talk a little bit about that?
Sure. I think what I was referring to there was the, we had a graphic depicting the market space, where on the vertical axis, we've got features, and along the horizontal axis, we have, the price of units. So basically, what we have seen historically was that there's a clustering between about $700 and $900 for these law enforcement grade cameras. Competitors like VIEVU or Digital Ally, or out of Australia, there's a company that makes another thing called eWitness. As we looked at this a few years ago, our initial strategy was, let's create a product that has the best features, and the features that really set us apart are, low light capability. We've got the best low light buffering so that we actually have a 14-hour battery. We can buffer video for the entire shift, allowing pre-event video buffer, so you can see what happened that caused an officer to start recording, and the ability to mount on glasses and through our magnetic mounting attachment and our partnership with Oakley. We priced this right at the upper end of the market segment in that $700-$900 range, at $950, including the year of Evidence.com. What we're doing now is we're finding that we've lost some of the market to these cheap consumer cameras because there were some customers, like Albuquerque, for example. Albuquerque went out and they bought, initially, a bunch of these, you know, $150 consumer cameras that you can see in SkyMall. Well, we eventually won Albuquerque, as you saw this morning. They've now migrated across entirely to our platform. They found major advantages by going with Axon Flex. Our camera's more durable. With Evidence.com, they picked up huge savings in officer efficiency. They saw usage of the system spike dramatically when users migrated from the consumer camera to ours. But this was an example where Albuquerque initially didn't even think to look in the higher end of the segment. They just went out and bought the inexpensive cameras. So what we're effectively doing now is we're saying, "Look, let's debundle." We can bring our prices down, frankly, far below the law enforcement cameras and close to the sort of cheap consumer cameras, close enough that we believe we can migrate many of those customers right onto our platform and skip the phase of them going with an inexpensive consumer camera. In doing this, we basically have become better positioned on an apples-to-apples basis versus the competition, and we believe that will drive volume and give more people the opportunity to try Evidence.com.
Gotcha. Okay, that's helpful. I guess then, since you didn't give market share data, do you have, and I know it's very early, do you have any sense as to how that's shaking out? How many out of every ten deals you guys feel like you're winning, for example?
Steve, this is Dan. I think, you know, I think it's early. You know, it's hard for us to sort of capture that completely just because a lot of the companies we're competing against are either private companies or companies that don't necessarily give sort of volume or unit data on their sales. You know, I think that, you know, our feeling is by reducing the price, we've got, you know, the most feature-rich camera set at the lowest price at this point. So, you know, we do expect that'll accelerate the share we are taking in the market. And, so we, you know, I think, I think we're certainly better positioned now than we were, say, even two weeks ago with the old pricing.
Yeah, I would add a little more color to that. I think on our last conference call, we discussed that I don't believe we've lost a headcam deal in North America this year. Nothing that's been on our radar. Deals that we've lost this year to date were typically for one of two reasons. The primary reason would be agencies that wanted just a body cam. They didn't want the, you know, the officers to wear something on their head, and we did not have a body cam offering. We've now fixed that, and it's early to say, I don't think we've, you know, that product just started shipping. But, early reviews are, we believe we'll, we'll take the lion's share of the body cam market, with our body cam. Again, I should qualify that with all the forward-looking statements. We can't, you know, we won't know that until we roll a little further into the future here, but we feel we're really well positioned. And then the other element that we may have lost deals on earlier this year, there's some agencies that are still just very trepidatious about using the cloud, and they, they feel like they've got to have their data on site. So we're also making sure that we're clearly communicating to our customers that our cameras can be used both ways. They can store the data locally if they want, or they can put it in the cloud. That's something we just need to continue to hammer from a messaging standpoint to make sure we don't lose any deals on that. And then, of course, the third element is pricing, which we talked about, and there we typically would have lost deals to the consumer cameras. We believe that this now makes us much more aggressive against that price segment.
Okay. Thank you. One more question for me, and I'll hop back in the queue. The Evidence.com has been out there, I think, for a little while now, certainly in a trial mode for a lot of departments. Do you have any statistics or metrics as to how sticky it's been, renewal rates, et cetera?
This is Jason. As far as how sticky it's been, when users get on the system, we see them use it more and more, so we don't see, you know, usage go down. As far as renewal rates, it's still a little bit early. You know, I think we wanna, you know, take a little bit closer look at that before disclosing any numbers.
I guess, I'll push a little farther then. Is your sense that it's sort of better than expected, worse than expected? Any qualitative metrics there at all?
I mean, I think. This is Dan. I think we're satisfied where we are. I think as Jason said, people who are using the system actively are renewing. And I think that's gonna be the key. That's one of the reasons why we added the account management group this year, to make sure that every customer has a good experience, to make sure they're using the system and understand the capabilities and make sure they're actively using the system. It's a little bit hard, you know, you know, one of the things from our perspective, you know, again, a lot of the early sales we've made of this product have been more like pay trials. So, you know, a lack of renewal isn't necessarily unexpected. It may be somebody who's just bought a couple cameras to trial it, and they're not quite ready to buy video, but that doesn't... You know, I wouldn't read too much into it. So we'll, you know, I think, you know, certainly as we move forward throughout the rest of this year and into next year, we'll have a better feel for the renewal rate. But I think we're satisfied where we are today, certainly for people who are actively using the system.
Yep. Okay. Thanks, guys.
Our next question comes from Glenn Mattson with Sidoti & Company. Your line is open.
Hi, everyone. So yeah, congrats on all the recent wins in video. And, I'm sure with all the, you know, voice of the customer work that you guys do, that you've worked out a pretty sensible strategy here, in pricing as, as the product matures a little bit. So, but a couple quick questions. The highest-end tier service, that people can sign up for when they do the five-year plan, so what's the plan? Can you still offer them, kind of new services down the road and maybe upsell them things like e-ticketing and record management services? That's one question. And then the second thing I want to know is, you know, as we move forward, have you gotten any queries from people who are just interested in the Evidence.com business yet? And if not, do you expect that at some point, and how far along until we see any of that type of orders?
Yeah. So, on the first question about whether or not we can sell them additional products over the course of that five years, the answer is yes. Basically, what that is, is it's they get incremental updates to Evidence.com over that period of time, but anything that's substantially sort of substantial to Evidence.com, like an e-ticketing system, would be a separate product purchase. So we are using that as a sort of a platform to sell them to other products if we, you know, eventually build them or partner for someone or partner with someone for them. And then on the Evidence.com side of things, we are getting interest for Evidence.com-only deals. Hard to say on exact timing for when those might come through, but, you know, the cloud is really great at scaling the management of, you know, big media files, and video and images are only getting bigger. And so agencies are having a tougher and tougher time scaling their own systems there, so we are getting queries there.
Okay. Yeah, makes sense. And then, I guess, the last thing I would ask is, is pricing the biggest hurdle you still face today, or do you still have to kind of convert people? ... to believing about, you know, the benefits and effectiveness of video for law enforcement?
Yeah. So I think on the on-body camera side of things, you know, there's wide acceptance that that's coming. It's gonna be here. The question is, you know, can we accelerate that from 10 years to 2 or 3 years? On the cloud, I would say the cloud is probably a little bit behind, you know, on-body cameras in terms of, you know, adoption. At the bigger agencies where they've seen bigger IT problems or had big, you know, more problems scaling their IT systems, I think they're ready. I mean, the federal government, with their Cloud First initiative, you know, and with the CIA's deal with, you know, Amazon Web Services. You know, at the federal level, there's sort of big pressure and press around the cloud, and that it's safe and that it's an okay option. And that's, you know, that's been driving sort of the cultural acceptance of it, and we continue to see that go in the right direction.
Okay, great. Thanks.
Thank you.
Again, ladies and gentlemen, to ask a question, please press star then one on your touchtone telephone. Our next question comes from Greg McKinley from Dougherty. Your line is open.
I'm wondering if you guys could just comment to the extent you're aware of other competitors that are either currently offering a combination of hardware and software solutions for this same purpose, or maybe to the extent that that isn't happening, are there any other just software service providers who have identified the same market you have with Evidence.com? Just help us understand that landscape a little better.
Sure. So this is Jason again. So I'll quickly comment on that. The law enforcement market lags a bit behind sort of the corporate market, the private industry market, in that there you know, there are on-premise systems that will help you manage your digital media. However, those on-premise software systems you know, have all of the execution risk and a sort of performance of you know, potential performance problems that you know, enterprise software on-premise you know has had in other spaces. In the cloud, we haven't seen anyone pop up in our market yet, although you know you can imagine as the market expands, that will happen. And then, what was the second part of the question?
So if you saw anyone bringing a combined hardware and software solution like you are, and it sounds like the answer to that is no. But anyone just attacking it from a software-only standpoint at this point in time?
Yeah, not, we haven't seen that in a targeted way at law enforcement in the cloud.
Okay. All right. Thank you.
If I could add some color on there as well, I would, I would just say, you know, some of the hardware, most of our competitors in this space, or fundamentally all of them, are hardware vendors that sort of offer free or very inexpensive software, sort of, to try to help sell their hardware. We have seen some of them now start putting cloud symbols on their website and talk about, "We're now in the cloud, too." Most of what we've seen there is like they're using cloud for backup, so they still, you know, it's sort of the worst of both worlds. You have to install the software, run a server on site, and then after you do all that, it'll run a backup to the cloud. We've not yet seen a sophisticated sort of information sharing with program hosted in the cloud, where you can deploy without on-premise software.
Yeah. I mean, we see competitors checking the box on cloud, but not actually building products with the cloud and mobile, you know, and all of these things in mind, actually deliver on the promise of the capability.
Mm-hmm. Thank you.
Thank you.
I'm currently showing no further questions. I will now turn the call back over to Rick Smith for closing remarks.
Great. Obviously, we're pretty excited with the announcement this morning of a couple big sales wins. Albuquerque, obviously, being a big one again. I think they were the largest deployment of on-officer video in the U.S. at least, and that was a big win for us to transition them onto our platform. Spokane as well, and Brookfield. You saw a lot of other, you know, smaller agencies or agencies making smaller purchases. We believe, you know, we're well positioned now with this new strategy to accelerate market adoption. This year, we have the... Or this month, we have the International Association of Chiefs of Police Conference. This year, our booth there will be the Evidence.com booth by TASER. We're putting a lot of effort around building the Evidence.com brand. Frankly, the TASER brand is so well known in law enforcement, it's sort of beyond the brand-building stage. We're in the sort of ramping steep part of the curve with Evidence.com in terms of building the brand and building market share. And to just round out the questions there, we are fully expecting that we will see competition arise in this space, especially as we see more success, which is one of the reasons that acceleration and of market share is so important to get as many customers converted and on our platform to see the benefits of what we do as fast as possible, before there's a lot of noise in the market of other people claiming they can do similar things. We think that it's a pretty difficult space to build a hard-integrated hardware, software company. It's taken us years to dial it in. I think you will continue to see that we're making a lot of progress here, doing a lot of great things. As we talked about, there's opportunities for us to extend into additional products that will create additional revenue streams over the next couple of years. And, you know, we couldn't be, you know, more excited to roll into IACP and into 2014. So thanks for your support as shareholders, and thanks for joining us this morning. Have a great day.
Thank you, ladies and gentlemen. That does conclude today's conference. You may all disconnect.