It’s not every day you’ll see an Aussie micro-cap working with one of the biggest companies in the world.
Today, though, that is exactly what Scout Security Ltd [ASX:SCT] has done, managing to lock in a new agreement with Amazon, of all companies.
That news naturally sent the market into a frenzy, with the Scout Security share price opening nearly 70% higher this morning.
However, those gains have been reeled in slightly, with the SCT share price trading 24.66% higher at time of writing.
Nevertheless, it is hard to overlook this incredible development for Scout.
Working with Alexa
Now, Scout’s partnership with Amazon isn’t technically a new development.
Both companies have been working together for a while now. Namely on a set of security initiatives for Amazon’s Alexa Guard. A software initiative that lets Amazon’s smart speakers become a home security device.
Crucially, this software is available in both Amazon’s smart speakers and Scout’s home devices, giving users of either device the same level of security as desired.
However, Amazon is working to improve this set of features, with a service it’s calling ‘Guard Plus’. This will not only detect intruders, alarms or incidents — but also work to actively deter them or call for help.
As part of this new service launch, Scout has been named as a key partner, so it will bring this technology to its own product suite as well. This will come at no extra cost for Scout subscribers, but will set Amazon users back a small monthly fee.
It will be fascinating to see just how popular this new offering will be. Because as Scout CEO Dan Roberts notes, the technology is advancing rapidly:
‘Amazon’s Alexa platform continues to be one of the most popular integrations we offer for the Scout system and, over the years, the use cases for voice assistants have expanded dramatically.
‘We’re excited to be able to leverage some of the advancements in home audio detection to offer an additional service that, we believe, will add another layer of security to our customers’ homes.’
What comes next for Scout?
It is clear that Scout has a good thing going with Amazon at the moment. This new partnership could be the catalyst that helps Scout take its business to the next level.
Indeed, that is something that investors will certainly be hoping for.
The challenge, I suspect, will be finding new innovations. Perhaps even broadening its capabilities beyond just Alexa and its own devices.
Whether or not that is possible remains to be seen.
For that reason, Scout is certainly a stock worth keeping an eye on. Whether or not it is worth investing in right now is up to you.
Instead, if I were looking for small-caps to invest in right now, I’d be looking elsewhere. I’d be hunting down stocks with a little more substance to them, which is exactly what we’ve done…
Our report on four ‘high-value small-caps’ details some of the best picks on the ASX right now.
And, in the meantime, put Scout on your watchlist. It may have a long road ahead of it, but it certainly has a lot of potential.
For Money Morning