Palantir Technologies: Fund Raising Signal
September 6, 2019
Palantir Technologies offers products and services which serve analysts and investigators. The company was founded in 2003, and it gained some traction in a number of US government agencies. The last time I checked for Palantir’s total funding, my recollection is that the firm has ingested about $2 billion from a couple dozen funding rounds. If you subscribe to Crunchbase, you can view that service’s funding round up. An outfit known as Growjo reports that Palantir has 2,262 employees. That works out cash intake of $884,173 per employee. Palantir is a secretive outfit, so who knows about funding, the revenue, the profits or losses, and the number of full time equivalents, contractors, etc. But Palantir is one of the highest profile companies in the law enforcement, regulatory, and intelligence sectors.
I read “Palantir to Seek Funding on Private Market, Delay IPO” and noted this statement:
The company has never turned an annual profit.
Bloomberg points out that customization of the system is expensive. Automation is a priority. Sales cycles are lengthy. And some stakeholders and investors are critical of the company.
Understandable. After 16 years and allegedly zero profits, annoyance is likely to surface in the NYAC after an intense game of squash.
But I am not interested in Palantir. The information about Palantir strikes me as germane to the dozens upon dozens of Palantir competitors. Consider these questions:
- Intelligence, like enterprise search, requires software and services that meet the needs of users who have quite particular work processes. Why pay lots of money to customize something that will have to be changed when a surprise event tips over established procedures? Roll your own? Look for the lowest cost solution?
- With so many competitors, how will government agencies be able to invest in a wide range of solutions. Why not seek a single source solution and find ways to escape from the costs of procuring, acquiring, tuning, training, and changing systems? If Palantir was the home run, why haven’t Palantir customers convinced their peers and superiors to back one solution? That hasn’t happened, which makes an interesting statement in itself. Why isn’t Palantir the US government wide solution the way Oracle was a few years ago?
- Are the systems outputting useful, actionable information. Users of these systems who give talks at LE and intel conferences are generally quite positive. But the reality is that cyber problems remain and have not been inhibited by Palantir and similar tools or the raft of cyber intelligence innovations from companies in the UK, Germany, Israel, and China. What’s the problem? Staff turnover, complexity, training cost, reliability of outputs?
Net net: Palantir’s needing money is an interesting signal. Stealth, secrecy, good customer support, and impressive visuals of networks of bad actors — important. But maybe — just maybe — the systems are ultimately not working as advertised. Sustainable revenues, eager investors, and a home run product equivalent to Facebook or Netflix — nowhere to be found. Yellow lights are flashing in DarkCyber’s office for some intelware vendors.
Stephen E Arnold, September 6, 2019
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