Palantir Technologies: Less War with Gotham?
November 9, 2016
I read “Peter Thiel Explains Why His Company’s Defense Contracts Could Lead to Less War.” I noted that the write up appeared in the Washington Post, a favorite of Jeff Bezos I believe. The write up referenced a refrain which I have heard before:
Washington “insiders” currently leading the government have “squandered” money, time and human lives on international conflicts.
What I highlighted as an interesting passage was this one:
a spokesman for Thiel explained that the technology allows the military to have a more targeted response to threats, which could render unnecessary the wide-scale conflicts that Thiel sharply criticized.
I also put a star by this statement from the write up:
“If we can pinpoint real security threats, we can defend ourselves without resorting to the crude tactic of invading other countries,” Thiel said in a statement sent to The Post.
The write up pointed out that Palantir booked about $350 million in business between 2007 and 2016 and added:
The total value of the contracts awarded to Palantir is actually higher. Many contracts are paid in a series of installments as work is completed or funds are allocated, meaning the total value of the contract may be reflected over several years. In May, for example, Palantir was awarded a contract worth $222.1 million from the Defense Department to provide software and technical support to the U.S. Special Operations Command. The initial amount paid was $5 million with the remainder to come in installments over four years.
I was surprised at the Washington Post’s write up. No ads for Alexa and no Beltway snarkiness. That too was interesting to me. And I don’t have a dog in the fight. For those with dogs in the fight, there may be some billability worries ahead. I wonder if the traffic jam at 355 and Quince Orchard will now abate when IBM folks do their daily commute.
Stephen E Arnold, November 9, 2016
Demand for Palantir Shares Has Allegedly Gone Poof
November 7, 2016
I read “Ex-Palantir Employees Are Struggling To Sell Their Shares.” Let’s assume that the information in the write up is spot on. The main idea is that one of the most visible of Silicon Valley’s secretive companies has created a problem for some of its former employees. I learned:
Demand has evaporated” for the shares that make up the bulk of Palantir’s pay packages, and the company’s CEO seems aware of financial angst among his staff.
The softening of the market for stock options suggests that the company’s hassles with investors and the legal dust up with the US government are having an effect. Couple the buzz with the prices in Silicon Valley, and it is easy to understand why some people want to covert options for cash money. I highlighted this passage:
Some said they needed the cash to buy a house or pay down debt, while another said they took out a loan to fund the process of turning the options into shares. One said it was “infuriating” trying to sell their shares in a “crap” market.
I found this statement from a broker, who was not named, suggestive:
This person then quoted an unidentified broker as saying, “There is absolutely nothing moving in Palantir. People who have bought through us are trying to sell now. I don’t see it changing without the company changing their tone on an IPO.”
With the apparent decision relating to the US Army and it procurement position with regards to Palantir going the way of the Hobbits, perhaps the negativism will go away.
One thought: Buzzfeed continues to peck away at Palantir Technologies. Palantir Technologies has a relationship with Peter Thiel. The intersection of online publications and Peter Thiel has been interesting. Worth watching.
Stephen E Arnold, November 7, 2016
Palantir: Seeking a Real Estate Ninja
November 2, 2016
The job descriptions and titles at Palantir Technologies are delicious. I noted that the company wants to hire a real estate ninja in New York City.
If the link is dead, you were not fleet of foot, grasshopper.
If Bruce Lee were only alive and looking for work.
Stephen E Arnold, November 2, 2016
Palantir Technologies: Hobbits 1, US Army 0
October 31, 2016
I read “Judge Rules in Favor of Palantir in Lawsuit against US Army.” Palantir is probably celebrating the decision which ruled in its favor. According to the write up in Defense News:
Palantir filed a bid protest in the US Court of Federal Claims against the US Army June 30 for issuing what it says was an unlawful procurement solicitation for the service’s next iteration of its internally developed intelligence software suite that shuts the company’s commercial offering out of the competition.
Caesar and the Battle of Alesia. Who’s Caesar? Who is Vercingetorix?
Palantir’s argument is that the US Army was reinventing the wheel. Palantir has a very good wheel, and the US Army should use that wheel on its intelligence system. The write up points out that Palantir perceives the US Army’s reluctance to use Gotham as “illegal and irrational.”
The write up adds:
The lawsuit opened up a can of worms on top of what has been a lengthy controversy over whether the Army should scrap its DCGS-A program after spending more than a decade and $3 billion to develop it and go with a commercial off-the-shelf solution.
The question which rises from this smoking hot ruling is, “What’s next?”
I can envision a Tolkien-like scenario in which the US Army chuckles and says, “That’s a great idea. We have been thinking about doing the Palantir thing for a while now.” Fade to a sunrise with Gotham and a US Army general chatting on the veranda at Donald Trump’s Washington, DC hotel.
There are other scenarios as well. These range from the US Army digging in its legal heels and implementing a Caesar like maneuver with Palantir playing the role of Vercingetorix? Or, is it the other way around?
The Gauls may support Caesar or Vercingetorix? I can envision powerful tribes of government contractors with dogs in the DCGS fight rallying.
One thing is certain: More excitement to come when there are billions in government contracts at stake and when some of the tribes fight under the banners of the US government’s go-to vendors. Will IBM embrace a new approach to the DCGS system? Will General Watson enter the fray?
So many questions. Definitely exciting for the firms currently billing for the existing DCGS system implementation, development, engineering, training, and support. Palantir, at least for this Halloween day, can plop one treat in its Filson backpack.
Stephen E Arnold, October 31, 2016.
Palantir Technologies: IPO Chatter
October 31, 2016
I read “Why the Secretive Startup Palantir Is Seriously Considering an IPO.” The Fortune story appeared after the video interview became available and a transcript diffused. You may be able to access the information at this Wall Street Journal link, but you may have to pay to read the transcript.
Here’s what I noted in the Fortune write up:
- An IPO allows employees to “cash out their shares at a fair price”
- But Palantir may not go public and “do something on the private equity side”
- An alternative is to “redistribute” profits
The Fortune article included this statement from Palantir’s CEO Alex Karp as well:
“I have f-cked up so many things at Palantir,” Karp said. “The one thing I have never screwed up is discriminated against anybody based on any variable that they would care about, and I’m very proud of that.”
I noted that none of the write ups about this interview mentioned that a decision from the US Army matter may be made as early as October 31, 2016. A positive decision will increase Palantir’s sales among the intelligence and law enforcement markets; for example, the French DGSI.
A negative decision may curtail Palantir’s growth in the intelligence and law enforcement sectors. Losing out on the DCGS opportunity means that Palantir may have to look to other markets to provide new opportunities for the company.
The question is, “Trick or treat for Palantir this Halloween?”
Stephen E Arnold, October 31, 2016
Palantir Awaits a Decision on its US Army Matter
October 28, 2016
More information is available about the Palantir – US Army legal matter. You can find the write up at this link. The decision, according to Bloomberg, may arrive on Monday, October 31, 2016. Palantir awaits its trick or treat day.
Kenny Toth, October 28, 2016
A Decision on the Palantir US Army Dust Up Looms
October 28, 2016
I read “Inside Palantir’s War With the U.S. Army.” The article follows a somewhat familiar line of thought about why a Sillycon Valley outfit wants to take the US Army to Federal court.
One of the major reasons, according to the article, is choice of clothing. I highlighted this passage:
The slacks and dress shirts with a few buttons undone that Palantir executives wore may have been a step up for sunny California where hoodies are the norm but were a sign of disrespect at the Pentagon, according to a person familiar with the meeting. Senior officials, including U.S. Assistant Secretary of the Army for Acquisition, Logistics and Technology Dean Popps, were not impressed, this person said. They told Palantir: “Don’t come to the E-ring without a tie unless your name is Gates or Buffet,” said the person, referring to the portion of the Pentagon occupied by senior officials. “They couldn’t get over the tie thing. They didn’t care about the technology.”
The culture disconnect between the Silicon Valley type and the Department of Defense type is real. The externalities of uniforms versus business casual are easy to spot. I read:
Because Palantir wasn’t able to show how its technology could work with the Army’s existing intelligence systems—the purpose of conducting both tests—it was sidelined from competing for a new contract and pigeonholed by Army officials as a niche player, Palantir claims in the documents.
One question is, “Why wasn’t Palantir able to show interoperability?” From my vantage point in Harrod’s Creek, I thought that this question was an important one. I wandered around my mental filing cabinet for some angles on this question about “Why?”
The decision about the Palantir –US Army legal matter may be made public on October 31, 2016. That’s Halloween in the US. Will Palantir be treated with a favorable decision with regard to its efforts to license Gotham to the US Army? Will Palantir be tricked by the legal maneuvers of US government legal eagles?
Three points struck me as I reflected:
First, Palantir Technologies was funded in part by In-Q-Tel. Some folks in the CIA love In-Q-Tel’s investments. Some folks point out that In-Q-Tel often gee whiz but often difficult to integrate into what are called “as is” systems. Most vendors make it difficult to integrate certain types of operations, data, or functions with their “as is” systems. The idea of open interchange of information is talked about and enshrined in SOWs (statements of work) but the reality is to keep the “as is” folks contracting for lucrative integration work. As logical as “snap in” and “seamless interchange” are in go go Palo Alto / Berkeley mindset, the “as is” crowd is a reluctant bride in many procurements, particularly multi-year deals.
Second, the Pentagon professionals have specific rules to follow when it comes to licensing software. For a company focused on being disruptive with gee whiz technology the rules are “not logical.” Software, for example, has to be free from backdoors. Software has to conform to various features and functions set forth in an SOW. Software has to be more than just disruptive, pretty, or state of the art. The software has to arrive via a process and be accompanied with people who can work within the often illogical rules of the US government. In my experience, this notion of “conforming” is one that does not compute for Googley-type companies.
Palantir Technologies: An Overview of What Looks Like a Muliti Front War
October 18, 2016
I read “Conservatives See Political Reprisal As Obama Administration Sues Peter Thiel’s Palantir.” Here in Harrod’s Creek “political reprisal” gets translated as blood feud. The source for the “reprisal” allegation is a real journalistic outfit, The Washington Times. The story appeared on October 16, 2016, when most of the movers and shakers in DC and other US power centers were gearing up to watch NFL football.
Let’s assume that the information in the write up is rock solid, built on verifiable “factoids”, and objective. This suspension of disbelief is helpful for me; otherwise, I would have some research to do. I prefer to let the article about political reprisal speak for itself.
The hook for the write up is the legal action taken by Palantir Technologies against the US Army. On June 30, 2016, Palantir filed legal documents to air the matter of the US Army’s reluctance to license the Palantir Gotham system instead of the Army’s DCGS or Distributed Common Ground System.
The write up points out that eight weeks after Palantir’s legal eagles dropped their payload on the US Court of Claims, the US Department of Labor pointed out that Palantir was discriminating against Asians. For Federal contractors, discrimination, if proven, is bad news. Loss of contracts and road blocks for future US government work are more than speed bumps for fast growing companies.
The article explains that Palantir perceives that it is not being given a fair shake; specifically:
The US Army “illegally prevented Palantir from bidding” when regulations required the armed service to seek already developed commercial products.
The write up draws a connection between a Palantir founder (Peter Thiel), who supports Donald Trump, and the alleged “political reprisal” by the Department of Labor.
The write up reports that Palantir’s legal eagles:
forced a number of Army intelligence czars to undergo sworn depositions by lawyers from the firm of Boies, Schiller & Flexner. While much of their testimony is under seal, some surprising snippets have emerged in follow-up legal motions asking the judge to rule based on the existing record of evidence.
The article asserts that a decision from the court may come as soon as the end of October 2016, which is pretty zippy based on my experience with US government processes.
The article then shifts to a discussion of the multi year, multi billion dollar DCGS system itself. Among the points in the write up I highlighted is this statement from the Washington Times’s write up:
Depositions also show that the Army misled lawmakers when it circulated a white paper on Palantir. The paper said the Army had conducted an extensive evaluation of Palantir when, in fact, it had not. “We did not do any formal evaluation or determination of whether or not the tools could live inside [the common ground system],” an Army official said.
I also noted this comment, which—if on the money—may make some of the big players in the DCGS contracting game nervous:
“This case has the potential to dramatically change not just DCGS as a program, for the better, but also the way the Army goes about contracting commercial solutions already in the marketplace,” said Joe Kasper, Mr. Hunter’s chief of staff. “From the beginning, utilizing Palantir has always been a win-win for the Army and the taxpayer. And if it takes a court decision to make the Army see it, then that’s just the way it is.”
The article then digs into the history of DCGS. The article reveals:
A confidential Army email reveals one reason Palantir never gained favor inside the halls of the Pentagon: Ms. Schnurr hated the system.
Okay, the article pinpoints Lynn Schnurr, once the US Army’s senior information officer, as the source of the burr under the saddle. Ms. Schnurr, the write up says:
appears to have an entrenched animosity towards Palantir, which has been spread and inculcated into the DA staff,” the [an unidentified US Army] officer wrote.
Ms Schnurr has an interesting background. She joined General Dynamics in February 2013. She left her job at the US Army in January 2013 after a 17 year career. She was a 1975 graduate of Virginia Polytechnic Institute (Blacksburg, Virginia) with a BS in education.
Several observations crossed my mind as I thought about this interesting example of “real” journalism:
- The sources for the write up remain a bit fuzzy. That’s not uncommon in some “real” journalism today. I find it annoying to read a reference to an email without a link to that source document.
- The write up laser dots Lynn Schnurr. I find it interesting that an individual is responsible for the behavior of procurement procedures. When I worked at Booz, Allen & Hamilton, it was unusual to find one person who could be identified as the “cause” of a particular event. The bureaucracy works in predictable ways because committees have to do the real work with assorted contractors lending a hand. I am confident that Ms. Schnurr is and was a force with which to be reckoned, but when I bumped into one government project and was hired by a sitting president, I was told: “Not even the president can pay you. Fill out these forms first.”
- Other issues affecting Palantir are not far to seek. The Washington Times did not explore such issues as: [a] Possible resistance to Palantir after the legal dust up about Palantir’s alleged improper use of i2 Group Analyst’s Notebook intellectual property, [b] Palantir’s providing some US Army personnel with access to Gotham without going through the US Army’s often Byzantine procedures, and [c] the clash of the Silicon Valley culture with the Beltway Bandit culture, among others.
If you are following the Palantir US Army legal matter, you will want to read the Washington Times’s article. However, there may be more information germane to the subject than putting Ms. Schnurr in the spotlight. Why identify a person no longer working at the Pentagon as a full time employee as the primum mobile? That triggers me to look for other factors.
In the back of my mind, I continue to consider the consequences of the i2 Group (now owned by IBM, a company with DCGS aspirations). I recall the shock of Sergey Brin’s visit to Washington when he chose to wear sneakers and a T shirt as he called on officials before Google embraced traditional lobbying and revolving doors. I understand the so-called “arrogance” of the start up culture when it encounters individuals who are not as “clued in” to the ins and outs of the Clue Train Railroad. I understand the connection between selling work and following government procedures and protocols.
I surmise that Palantir is facing down a bureaucracy which wants what it wants when it wants it. Outfits which light up the radar screens of numerous individuals in the bureaucracy find themselves burdened with tar balls at every turn. Palantir faces not a singleton issue like the legacy of Ms. Schnurr. Palantir finds itself dealing with the consequences of its actions since the company took CIA – In-Q-Tel funds and received the smiles of a powerful intel outfit.
I have not worked in Washington’s corridors of power for years, but I know that friction can exist between Executive Branch agencies and other US government units. Palantir may be caught of a multi front war here in the USA. Write ups like the one in the Washington Times may only provide a glimpse of a larger, more variegated scene and raise other questions; for example, fund raising, taxes, etc.
Stephen E Arnold, October 18, 2016
Palantir Technologies: Pushing Back at Labor
October 15, 2016
Goodness gracious. Palantir Technologies is becoming a public outfit despite its penchant for secrecy. The company was featured in a Fortune Magazine write up called “Palantir Responds to Labor Department’s Discrimination Lawsuit.” Too bad Fortune’s online site did not include a link to the Palantirians’ response. The main point is that the US Department of Labor did not reflect reality. The main point of the Fortune write up struck me as this statement:
Palantir’s aim? To clear its name and move on.
Yeah. My hunch is that the “aim” is to continue to get US government contracts and not lose the work already underway. The notion that Palantir’s reputation is fueling the hassle with Labor is interesting. My view from rural Kentucky is that Palantir sued the US Army and the wheels of government often turn in eccentric ways. I am surprised that the IRS and SEC have not raised questions. In the current political climate, fooling around with government bureaucracy can be interesting.
Stephen E Arnold, October 15, 2016
Palantir Technologies to Square Off Against Skadden, Arps
October 14, 2016
Palantir Technologies asserted that an investor in Palantir of taking information from the Shire. Armed with the treasure trove of secret Hobbit lore, the investor in Palantir filed patents using the seeing stone-type information.
Sound like a Netflix or Amazon binge watcher?
My hunch is that the legal dust up between Palantir Technologies and Marc Abramowitz may be almost as much fun as the Google-Oracle dispute or an El Chapo extradition hearing.
Mr. Abramowitz has hired Skadden, Arps, which is shorthand for Skadden, Arps, Slate, Meagher & Flom or SASMF. Fascinating acronym to decode if one does not know the full name of the the outfit which has been named America’s best corporate law firm for more than a decade. The 2,000 lawyers are supported by more than 2500 others. This is better than most cruise ships’ passenger to staff ratios.
How will Skadden, Arps deal with the allegations of making patents out of Hobbit labor? According to “Palantir Investor Taps Skadden in Trade Secrets Feud,” Skadden, Arp legal maestro said:
“Though artfully pled as a series of putative state-law claims, the operative complaint seeks to have plaintiff Palantir Technologies Inc. declared the sole inventor of three separate technologies that were in fact invented and developed by Mr. Abramowitz as the sole or joint inventor. Palantir’s claims necessarily raise substantial questions of federal patent law that can be resolved only by a federal court.”
Palantir seeks remediation under California law. Skadden, Arps is going to pop up a level. The Palantir legal eagles at Perkins Coie may have to tap into the Palantir seeing stone to foretell what the trajectory of a federal level patent case will be.
I don’t have a seeing stone. I am not even a Hobbit. I don’t work in the Shire. I labor in rural Kentucky. I consulted the fellow at the gasoline station and asked, “What’s the likely outcome of the Palantir-Abramowitz legal matter?”
He replied without looking up from his brown paper sack stuffed with a greenish bottle, “Expensive.” Bingo.
Stephen E Arnold, October 14, 2016
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