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Another Palantir Push: But Little Hard Financial Data. Why Not?

I was reading about the TED Conference’s yo-yo presentation. My eye drifted across an expanse of cellulose and landed on “The Humane Way to Crack Terrorists.” (This link will go dead so be aware that you may have to pay to read the item online.) The subtitle was one of those News Corp. Google things: “Big data may make enhanced interrogation obsolete.” The source? Some minor blog from America’s hinterland, Silicon Valley? Nope. The Wall Street Journal, February 23, 2013, page C 12.

What’s the subject – really? The answer, in my opinion, Palantir. If you monitor the flagship, traditional media, Palantir has a solid track record of getting written about in print magazines. I suppose that the folks who have pumped about $150 million into the “big data” company read those magazines and the Wall Street Journal type publications each day. I know I do, and I am an addled goose in rural Kentucky, the high tech nerve center of the new industrial revolution. After February 28, 2013, I am not sure about the economy, however.

Here’s the passage I noted:

There’s a tellingly brief passage in “The Finish: The Killing of Osama bin Laden” by Mark Bowden. “The hunt for bin Laden and others eventually drew on an unfathomably rich database,” he writes. “Sifting through it required software capable of ranging deep and fast and with keen discernment—a problem the government itself proved less effective at solving than were teams of young software engineers in Silicon Valley. A startup called Palantir, for instance, came up with a program that elegantly accomplished what TIA [Terrorism Information Awareness program, set up in 2002] had set out to do.” When I met the chief executive and co-founder of Palantir, Alex Karp, recently, he was straightforward: “It is my personal belief that flawless data integration at any kind of scale, with a rigorous access control model, allows analysts to perform operations that are only intrusive on the data. They are not intrusive on human beings.” Obviously, Palantir doesn’t comment on classified work. But its technological phalanx—processing countless leads, from flight manifests to tapped phone calls, into one resource for people to interpret—is known to have been key in locating bin Laden. The company, founded in 2004, has large contracts across the intelligence community and is enterprise-wide at the FBI. Its first client was the CIA.

Nifty stuff. Palantir has high profile clients like intelligence and law enforcement outfits. But where is a hedge fund or a consumer products company? Allegedly the fancy math technology can work wonders. The implication is that outfits like Digital Reasoning, Recorded Future, and even Tibco are not in Palantir’s league. Oh, really? What about outfits like IBM and Oracle and SAS? Nah. Palantir seems to be where the good stuff happens in the context of this Wall Street Journal article.

In my view, the write up triggered several notes on my ubiquitous 4×6 paper note cards, just like the ones I used in high school debate competitions:

First, what about that legal dust up with i2 Group? Here’s a link to refresh one’s memory. I recall that there was  also some disagreement, a few real media stories, and then a settlement regarding sector leader i2. Note: I did some work years ago for this out, which is now owned by IBM. Oh, and after the settlement silence. Just what was that legal dispute about anyway? The Wall Street Journal story does not touch on that obviously trivial issue related to the legal matter. Why not? The space in the newspaper was probably needed to cover the yo-yo guy.

Second, can software emulate the motion picture approach to reality? In my experience, numerical recipes can be useful, but they can also provide some points which are subject to contention. A recent example is the gentleman’s disagreement about an electric vehicle. Data, analyses, and interpretations—muddled. Not like the motion pictures’ tidiness and quite final end point. “The end” solves a lot of fictional problems. Life is less clear, a lot less clear in my experience.

Third, how is Palantir doing as a business? After all, the story ran in the Wall Street Journal, which is about business. I appreciate the references to a motion picture, but I am curious about how Palantir is doing on its march to generate a billion or more in revenues. At some point, the investors are going to look at the money pumped into Palantir, the time spent developing the magical technology which warrants metaphorical juxtaposition to Hollywood outputs, and the profitability of the company’s sales. Why doesn’t the Wall Street Journal do the business thing? Revenue, commercial customers, and case studies which do not flaunt words which Bing and Google love to consume in their indexing systems?

It is Saturday, and I suppose I there are lots of 20 somethings working at 0900 Eastern as I write this. They will fill the gap. I will have to wait. I wonder if the predictive algorithms from Palantir can tell me how long before hard facts become available?

One final question: If this Palantir type of system worked, why aren’t the firms in this Palantir-type software sector dominating in financial services, marketing, and consumer products? I wonder if the reason is that fancy math generates high expectations and then creates some situations in which reality does not work just like a cinema thriller?

Stephen E Arnold, February 23, 2013

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