With PublicEngines And Wynyard, Motorola Looks To Curb Competition And Increase Service Revenues

Building on its earlier acquisition of PublicEngines, Motorola Solutions (NYSE:MSI) landed a partnership with New Zealand based crime-fighting software firm Wynyard Group last month, in order to provide better crime fighting solutions to its law enforcement agency clients. The company’s motive behind these deals was to improve its credibility in Smart Public Safety Solutions by providing improved crime mapping, and kill competition from smaller players. With weaker competition and better products, it now becomes relatively easier for Motorola to sell its crime mapping solutions to government clients in new jurisdictions, which should ultimately bolster its service revenues. However, the impact on the company may remain minimal given that Smart Public Safety Solutions is a small segment for Motorola.

In April this year, Motorola bought Utah-based crime analytics firm PublicEngines for an undisclosed amount, for its big data software products. ^[1] PublicEngines provides crime analytics, predictive policing and citizen engagement capabilities for law enforcement, government and other organizations. Wynyard’s crime-fighting software allows quick and effective analysis of different data sets to determine crime patterns and find missing connections within a case. Motorola plans to integrate this software with its Intelligence-Led Public Safety Platform, which will enable its clients to solve cases faster with fewer resources. ((Advanced Crime Analytics Means Bad News For Criminals, Motorola Solutions, Jun 11 2015))

Our $65 price estimate for Motorola is about 5% ahead of the current market price.

See our complete analysis for Motorola Solutions here

How PublicEngines Acquisition Helped Motorola

Since PublicEngines was working in the same domain as Motorola, it could have turned into a competitor for the company at some point. Its acquisition not only ended the threat, but also provided Motorola with PublicEngines’ compelling software products. PublicEngines’ product portfolio includes several Intelligence-Led Public Safety and citizen engagement softwares. CommandCentral Analytics, catering to public safety clients, provides data visualization in analytical dashboards and maps, allowing customers to make better decisions with fewer errors in judgement. CommandCentral Predictive offers solutions for predictive policing such as recommendations for resource allocation, timing of patrols and other aspects to prevent crime. CrimeReports is one of the most popular online crime mapping platforms, which provides easy sharing of alerts and crime information with citizens through customers’ websites and apps. TipSoft is a tip management platform, where organizations receive tips and subsequently respond to them, while keeping the source anonymous.

The acquisition of PublicEngines bolstered the product portfolio of Motorola’s Smart Public Safety Solutions, which already had several hardware and software solutions for customers’ “command and control” centers offering video monitoring, data analytics and content management. The entire purpose of Motorola’s Smart Public Safety Solutions is to enable smart policing, and the aforementioned acquisition definitely improved the effectiveness of products offered to clients.

How Wynyard’s Software Complement PublicEngines’ Products

Wynyard’s software enables law-enforcement agencies to quickly identify criminal patterns and find connections using various data sources such as criminal history, social media networks, property records, field notes and other evidences. The software takes minutes to accomplish the task, which would otherwise take up days and substantial resources of an agency. This ultimately improves law-enforcement agencies’ efficiency in solving cases and mapping crimes. Motorola believes that Wynyard’s next-gen crime analytics will work very well in tandem with PublicEngines’ CommandCentral Analytics and CommandCentral Predictive. It will help clients combine, analyze and translate data and evidences into a relevant outcome, which can subsequently help in deterring, detecting and solving crimes.

The company says that public agencies, big or small, will be able to improve their efficiency by adopting its Intelligence-Led Public Safety “software as a service” (SaaS). It is fast and effective, and can be easily used to share data and outcomes across various jurisdictions, thus helping law enforcement agencies to fight crime at a larger scale. With an improved Smart Public Safety Solutions package, Motorola is looking to draw attention of new and existing clients, who can adopt or upgrade the service.

How Does This Help Motorola

For Smart Public Safety Solutions, Motorola’s main customers are government agencies, who usually have strong negotiating power. This limits the possibility of Motorola charging higher prices for its services even with advanced products. However, a better product portfolio for crime mapping and predictive policing will help the company keep a check on competition from smaller players, who can offer similar services at a cheaper price. The main benefit for Motorola will stem from fresh deals with government agencies in un-penetrated jurisdictions, where it can easily defeat competitors with advanced offerings.

Motorola’s Smart Public Safety Solutions is a small part of its services division, which contributes about 30% to the company’s value as per our estimates. Therefore even a substantial improvement in Smart Public Safety Solutions revenues may not translate into a notable impact on the company. Currently, service revenues are about 55% of product revenues and we estimate this to increase to 63% over the next five to six years. This figure would have to increase to 73% to bring about just a 5% upside to our price estimate for Motorola. Although the aforementioned deals may not be able to drive the figure there, they are steps in the right direction nonetheless.

View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research

1. Motorola Solutions Advances Smart Public Safety Innovation with PublicEngines Acquisition, Motorola Solutions, Apr 1 2015 [↩]