Axon Enterprise (AXON -1.34%) may finally have a competitor that can't be easily beat.

Motorola Solutions (MSI 0.06%) is launching a new video-as-a-service (VaaS) platform with a suite of products and services that could eat into the Taser maker's dominating market share because it has some of the same attributes that enabled Axon to earn so many contract wins.

Since Motorola is also a financially bigger and arguably stronger rival that is now targeting the heart of Axon's business, let's see how big of a threat the competition is to the Taser-maker's standing. 

woman sitting a police dispatch center

Image source: Getty Images.

Supplying police is a competitive field

Axon has a lot of competitors across its product portfolio. Beyond Motorola, Digital Ally is one of Axon's primary camera rivals that has sued and been sued for  patent infringement. Tyler Technologies offers computer-assisted dispatch (CAD), records management, and artificial intelligence analysis capabilities; CentralSquare provides a complete portfolio of records and evidence management, analytics, and CAD; and Wrap Technologies offers less-than-lethal suspect restraint systems.

There's also Mark43, a public safety software outfit backed by Jeff Bezos, which uses Amazon Web Services for its cloud computing needs.

Yet competitors have been unable to mount a serious challenge to Axon because it created a comprehensive suite of product offerings that fully integrate with one another, creating an ecosystem that's difficult to leave.

Its Tasers and body cams seamlessly send real-time activation and discharge data to the evidence management system that is fully searchable and can sequester information to protect identities or that is otherwise unrelated to the incident. The software starts at $109 per officer using the equipment.

Going one better

Motorola appears to be taking all the pieces it offers and wrapping them in a similar single, cohesive package, by bundling body cameras, digital evidence management, and cloud-based support for just $49 per user, making it an attractive option for budget-constrained agencies.

Because law enforcement is already familiar with Motorola through many of its existing systems, such as its two-way radios, computer-aided dispatch (CAD), cameras, and records management, the two can readily expand their relationship.

Because of its leadership role in CAD, law enforcement agencies would likely feel very comfortable adopting Motorola's other solutions as one.

Axon has to play catch-up

Realizing it was missing an important component in the race to continue winning contracts, Axon launched its own CAD system late last year called Respond to provide a unified communications application. Axon also launched its Air program, which are drones that were developed with leading drone-maker DJI. It also intends to launch Fleet, a connected in-car camera system.

Yet where Axon has an estimated 90% share of the conducted electrical weapons market after rivals like PhaZZer, Stinger, and others couldn't fight off Axon's patent protection, and some 70% of the body cam market, it's well behind Motorola, Hexagon Safety Infrastructure, and Tyler in this area of the law enforcement ecosystem.

That gives Motorola Solutions a wedge it can use to unseat Axon. The VaaS package includes Motorola's V300 body-worn camera, a spare battery and mounting device, and access to digital evidence management, records management, and digital evidence migration services for agencies that want to switch providers, a clear indication Motorola wants to encroach on Axon's territory in a big way.

Integrating each facet of call-and-dispatch, on-scene command, incident report generation, and evidence management into a single package makes a provider "sticky" with a department. The time and costs associated with migrating from one provider to another could be daunting, but providing tools to allow for a seamless transition could be attractive, especially for agencies looking to save money.

A fight on its hands

Motorola Solutions is a better-financed rival to Axon than many of the competitors the stun gun maker has faced in the past, with a market cap some three times larger. While Axon has been the better growth stock than Motorola over just about any time period you want to look at, that could change if it starts losing contracts.

Yet just as Axon Enterprise developing a new CAD program doesn't automatically mean it will successfully win share in the space, Motorola developing an offshoot of the software-as-a-service model at lower cost isn't automatically a winner. But it does mean Axon now has a real rival that could present a true challenge.