Palantir Technologies: A Very Unusual Emission from a Specialized Services Firm
May 26, 2020
The PR battle among the firms providing specialized services to law enforcement and intelligence entities has taken an unusual turn. If you send email to an outfit like BlackDot, you will probably be ignored. The same non response holds true for the vast majority of firms delivering solutions that put bad actors at a disadvantage. Sure, there are less low profile uses of these technologies, but applications like eDiscovery do not capture the attention of the real media.
DarkCyber spotted “Our Product Is Used on Occasion to Kill People’: Palantir’s CEO Claims Its Tech Is Used to Target and Kill Terrorists.” DarkCyber has noted that NSO Group has found itself in the PR spotlight due to allegations from Facebook and assertions about an NSO professional using the firm’s system for personal activities. But the “kill people” thing is sure to catch the attention of the hundreds of specialized service firms’ attention.
What’s even more interest catching is that one of the senior managers of Palantir Technologies serves as a member of the Axel Springer shareholder committee. What’s an Axel Springer? The company owns Business Insider, the “real news” outfit which reported Mr. Karp’s rather intriguing statement about a use case for Gotham and other Palantir modules.
The story also provides a link to a video from an outfit called Axios, presumably to buttress the “true fact” of Mr. Karp’s statement.
For a low profile outfit to offer this alleged admission about software’s link to termination with extreme prejudice may have some downstream consequences. With low profile companies like Shadowdragon publicizing its system on Twitter, will PR become the go-to marketing method in the future?
Making sales is one thing, but some government customers are wary of specialized services vendors who hum the 1960s song “Talk Too Much.” Some licensees can consult the “seeing stone” or just hit Philz and listen for some Palantirian chatter.
Stephen E Arnold, May 26, 2020
Schmidt Versus Thiel May Be a Proxy for Google Trying Catch Up with Palantir
May 3, 2020
You will need to read the very, very long PR fest in the New York Times. I won’t do much with this story, so you will have to find the dead tree edition or pay to play to read “I Could Solve Most of Your Problems: Eric Schmidt’s Pentagon Offensive.” Yeah, hubris.
The headline does the job. But what’s with the PR push from the former CEO of Novell and then a similar job at Google.
But Google fired the Department of Defense. The current administration left Mr. Schmidt in his committee roles as the administration of Mr. Trump raced forward. Who accompanied him on his technology sprint? The Google, nope. The driver of the Bezos bulldozer? Not a chance.
Who then? Peter Thiel, the high profile Silicon Valley whiz, investor in Palantir Technologies and, probably as interesting, Anduril, a forward-leaning outfit engaged in primary data capture and action-oriented outputs for operators. Anduril, you say? Yes, I say.
Several items to keep in mind as this story wends its way through the pundit-verse:
- Mr. Trump is president, and he seems comfortable with the Palantir Technologies’ solutions
- Mr. Trump seems okay with Mr. Thiel
- Google dumped Maven and has been Googley in numerous US government endeavors. (This is nothing new because the behavior surfaced in the early days of the Mountain View tornado. Remember the objection regarding the FirstGov.gov contract award? Remember Mr. Brin’s wearing sparkly sneakers and a sporty T shirt to meetings with elected officials?)
Net net: Big PR coup and “real news” from the New York Times. The reality is that the the “real news” story is about Googler and the Google appear to be trying to regain traction—Traction lost with certain interesting behaviors. The problem is that the road to the White House has been subjected to abuse by the dozer tracks of other companies trying to reach the Valhalla of big money, multi year contracts. Googzilla my struggle for purchase where it counts. The NYT’s “real news” story may not be what Mr. Schmidt needs.
Stephen E Arnold, May 3, 2020
Palantir to Help HHS Track Coronavirus
April 28, 2020
With Peter Theil’s ally in the Oval Office, Palantir Technologies’ fortunes have ballooned. Now, in addition to working with intelligence, military, and law enforcement agencies, the data-mining firm has contracted with the Department of Health and Human Services. The Daily Beast reports, “Team Trump Turns to Peter Theil’s Palantir to Track Virus.” Sources say the company will contribute a major aspect of the HHS Protect Now platform, perhaps even its core element. That element is rumored to be the existing Foundry data integration and management platform. The CDC has been using Foundry to track hospitals’ efforts to cope with the surge in COVID-19 patients.
Reporters Erin Banco and Spencer Ackerman write:
“The HHS Protect Now platform, which is set to be unveiled later this week, pulls data from across the federal government, state and local governments, healthcare facilities, and colleges, to help administration officials determine how to ‘mitigate and prevent spread’ of the coronavirus, according to a spokesperson for the department. HHS told The Daily Beast that the department was working with the Centers for Disease Control and Prevention (CDC) and the Federal Emergency Management System (FEMA) on scaling the HHS Protect Now project, which became operational on April 10. … HHS said it has 187 data sets integrated into the platform, with inputs that include hospital capacity and inventories, supply chain data from the government and industry, diagnostic and geographic testing data, demographic statistics, state policy actions, and coronavirus and flu-like emergency department data. The spokesperson also said HHS was relying on ‘private sector partner contributions of data.’”
The tool generate models to predict the spread of the disease as well as the impact of decisions by the administration’s task force, state governments, and local leaders.
Cynthia Murrell, April 28, 2020
Palantir Technologies: Getting the NSO Treatment
April 24, 2020
Rupert Murdoch’s real news outfit published “Data Firm Palantir Saw Crisis Coming, Still Faces Pain.” If you want the online version, you will have to pay. The dead tree version of the story is on B5 of the April 22, 2020, edition of the WSJ which is sometimes delivered to me in rural Kentucky.
Enough about the real news outfit. I want to run down some of the assertions made about Palantir. Assertions, I wish to add, from anonymous sources or people close to the vendor of intelware, not verifiable sources.
I highlighted these factoids from the article:
First, Palantir does a lousy job of sharing its financial information. How does the Wall Street Journal get its revenue estimate from 2019? How does the WSJ know that $100 million in costs have be removed from the firm’s operating budget? Easy. People “close to the company” and two unnamed “investors.”
Second, Palantir is pulling back from its rumored initial public offering after the November elections. Palantir has pulled back or put off an IPO for many years. But now Covid enters the picture.
Third, Palantir is providing “a single source of truth about the rapidly evolving situation.” The situation is making sense of pandemic data and the individuals who are infected or infecting. This is a contentious issue. High profile publicity like that the NSO Group has experienced is not a sales booster in some cases.
There are some other factoid assertion like rumors in the write up, but I want to address the three points I selected from the WSJ write up.
- With regard to sharing its financial data, privately-held companies are not obligated to share financial data. Palantir does, but it may not be the data investors or employees want to see. Palantir is in the secrecy business, and it is tough for specialist firms to tell anyone anything. This is not something unique to Palantir. Write Blackdot for information. Let me know how that goes, please.
- The pullback from an IPO is nothing new. Palantir took shape in 2003. Let’s see. That’s almost 17 years ago. If the firm were in a position to crank out those facing IPO documents and go through the stellar Securities & Exchange Commission process and then hit the road to chat up the market makers, Palantir and its big money backers would have volunteered to drive the minivan from meeting to meeting. There’s a reason why the Palantir IPO is unlikely to happen. Hypothetically the company is concerned about revealing data. Another hypothetical is that companies selling policeware and intelware are not loved by some investors. Check out Verint, please. How much information does the company actually provide about its specialized services? Yeah, about as much as Siemens.
- Third, Palantir pitches the single source of truth idea. But that’s marketing, and it is not a tagline that makes potential buyers say, “Hey, I get it.” To make a Palantir-type sales takes time. The reason is that there are not as many customers for these specialized products as some people like high-flying investors assume. Palantir is more than 15 years old, and Herzliya, Israel is chock-a-block with start ups that are spry, hungry, and equipped with better-faster-cheaper specialized solutions. The sales problem is baked into the specialized software sector. Not even IBM can keep some cyber intelligence sheep in line. South Africa selected an intelware vendor from Poland, not the once proud nation of Big Blue.
So what?
From DarkCyber’s point of view, the Wall Street Journal could dive into more substantive aspects of Palantir and actually identify where the information originates. Even middle school students have to provide a footnote even if it is to Wikipedia. That may garner a C. But no verifiable sources? That’s nosing into the murky land of failure.
Stephen E Arnold, April 24, 2020
Palantir Technologies: Evidence That Making Big Money Comes from a Financial Play, Not a Product
April 12, 2020
DarkCyber spotted an interesting item of information in “Palantir Eyes $1B in Revenue and a Break-Even Year, Setting the Stage for IPO.” Palantir has ingested more than a billion dollars since it was founded in 2003. (That seems to be 17 years!) The article points out that Palantir “will have its first break even year in 2020.” The message is that it takes time and significant investment to generate $1 billion in revenue and break even.
With dozens and dozens of companies chasing the intelware and policeware markets, what’s the likelihood that a start up will be able to generate enough revenue to:
- Fund customer support
- Invest in new features and technologies
- Attract and retain staff
- Market to sectors that are expensive, time consuming, and difficult to reach?
The answer is that Palantir is an excellent example of how a useful idea can struggle to generate sustainable revenue among customers under severe budget pressure and aware that the “next big thing” can be obtained either on a trial basis or at a low price.
DarkCyber gives Palantir credit for its perseverance, although its methods of obtaining some traction can be considered more than interesting. In fact, in its dealings with the Analyst Notebook file format, interesting does not quite capture the somewhat unusual techniques the firm found appropriate.
When Palantir goes public, will those patient investors reap massive paydays? The investors hope so. The employees hope so. But the lawyers and accountants know they will be paid.
What about the users of the system? DarkCyber does not know. Perhaps the seeing stone will reveal the answer?
Stephen E Arnold, April 12, 2020
MiningLamp Technology: Another Palantir?
March 30, 2020
DarkCyber found “China’s Palantir MiningLamp Raises US$300 Million in Funding Round Co-Led by Temasek, Tencent” intriguing. Palantir Technologies, a company providing commercial and government services, has obtained about $2 billion in funding since it was founded in 2003. Furthermore, Palantir in the past 17 years has worked to become the Analyst Notebook and BAE NetReveal for some of its clients. Note that Analyst Notebook was founded in the early 1990s and BAE’s initial intelware products date from a few years later. In short, MiningLamp wants to become:
- A company that requires decades to gain momentum
- A company that requires billions in funding or the support of a giant industrialized services firm like BAE to survive
- Expert lobbying to spark and obtain government contracts
- Remain out of the public spotlight while endeavoring to displace products that are long in the tooth.
Does this make sense? Of course, the MiningLamp operation wants to be a global software and services company. The backers of MiningLamp want to have a seat at the table when certain types of projects are planned and executed.
The write up does not point out these rather obvious facts. DarkCyber learned:
Founded in 2014, MiningLamp gained initial success by offering online ad performance evaluations and fraud detection services for advertisers, before expanding the business to industries such as public security, smart cities, finance, logistics, entertainment, retail and manufacturing.
What’s MiningLamp’s technology deliver?
Although not as well known as US equivalent Palantir Technologies, which reportedly contributed to America’s success in hunting down Osama bin Laden, MiningLamp’s data mining software is used to spot crime patterns, track drug dealers and prevent human trafficking.
Plus, the write up points out:
The company’s software enables users to search huge volumes of heterogeneous data – information with a great variety of types and formats – and process that into actionable knowledge and insight using a combination of proprietary data management tools.
The interesting point is that advertising technology leads to a Palantir metaphor. The second fact is that the funding is anchored in Singapore and the allegedly independent company Tencent. There’s no reference to any other funding, including funding from Chinese government entities or fellow travelers. Finally, Singapore has become a hub for many companies engaged in Palantir-like activities. Need a bagel? Singapore has them because there are quite a few foreign nationals who crave this food essential.
Now how much revenue can specialized software companies generate. Analyst Notebook, BAE NetReveal, Recorded Future, and similar firms do generate revenues, but none of these companies bang into glass ceilings and walls. For example, how many government agencies are there that can pay hundreds of thousands of dollars and dedicate personnel to using these intelware systems? Are there other benefits to companies in the intelware business? The market for intelware is tough to move laterally. Talk about intelware methods and customers in non-government sectors, and many of the prospects get really nervous. There are good reasons.
Is MiningLamp another Palantir? Sure, it will require large amounts of cash, lobbyist support, and funding the peculiar and costly intelware marketing puzzle.
There are interesting facets to the MiningLamp effort, but DarkCyber does not think the answer will be found in providing Bluedot-type services or morphing into an outfit like Palantir Technologies. Palantir, DarkCyber recalls, has experienced employee protests, litigation with Analyst Notebook related to reverse engineering the ANB file format, and bureaucratic scuffles with procurement professionals.
Another Palantir? Maybe, maybe not. Those writing checks for $300 million may be surprised at the intelware market’s behavior. Will the Five Eyes sign up for MiningLamp licenses? Maybe, maybe not.
Stephen E Arnold, March 30, 2020
DCGS: Palantir and BAE Seem to Be Winners
March 9, 2020
DarkCyber noted “BAE, Palantir Earn Spots on $823M Army Contract.” The Distributed Common Ground System Army has an interesting history. To make a long story short, DCGS chugs along. BAE System will compete for task orders with Palantir.
The write up reports:
That system provides the Army with intelligence from multiple sources over networks of varying security levels and includes “laptops and desktops, fixed, portable and vehicle-mounted servers, and ground stations to receive, share and store collected intelligence” and software programs to analyze and share that information.
According to the US Army:
DCGS-A connects Soldiers to the Intelligence Community, other Services, multiple joint intelligence, surveillance and reconnaissance (ISR) platforms and sensors and Army Mission Command systems. It gives commanders the ability to view ISR information in one place. It also integrates that information into tools that can support intelligence development.
The key point is that DCGS A becomes a “model” approach for other military branches as well as for some of the US government’s enforcement entities.
Stephen E Arnold, March 9, 2020
Palantir and Sompo: Is a $150 Million Deal Big Enough, Too Small, or Just Right
November 19, 2019
Palantir Technologies has ingested about $2 billion in a couple of dozen investment rounds. Now a $150 million deal is very important to a services firm with a few million in sales. To an outfit like Booz, Allen or Deloitte, $150 million means a partner will keep her job and a handful of MBAs will be making regular flights to wonderful Narita.
“Thiel Marks Palantir’s Asia Push with $150 Million Japan Venture” reports that Sompo Holdings is now Palantir’s partner, noting that the $150 million may be more of an investment. We noted this passage:
The billionaire entrepreneur [Peter Thiel] was in Japan Monday to unveil a $150 million, 50-50 joint venture with local financial services firm Sompo Holdings Inc., Palantir Technologies Japan Co. The new company will target government and public sector customers, emphasizing health and cybersecurity initially. Like IBM Corp. and other providers, Palantir’s software pulls together a range of data provided by its customers, mining it for patterns and displaying connections in easy-to-read spider web-like graphics that might otherwise get overlooked.
Bloomberg reported:
Palantir is very close to breaking even and will end 2019 either slightly in the black or slightly in the red, Thiel said at the briefing. The company will be “significantly in the black” next year, he added.
A few comments from the DarkCyber team:
- The money in the headline is not explained in much detail. There is a difference between setting up a new company and landing a cash deal.
- Bloomberg seems indifferent to the revenue challenge Palantir faces; namely, there are quite a few investors and stakeholders who want their money plus interest. The announcement may not put these individuals’ minds at ease.
- The news story does not mention that new, more agile companies are introducing solutions which make both IBM Analysts Notebook and Gotham look a bit like Vinnie Testaverde or Bart Starr throwing passes at a barbeque.
Singapore is the location of choice for some of the more agile intelware and policeware vendors. Is Japan is a bit 2003?
To sum up, Palantir is to some a start up. To others Palantir is an example of a company that may lose out to upstarts which offer a more intuitive user interface and slicker data analytics. It is possible that an outfit like Amazon and its whiz bang data market place could deliver a painful blow to a firm which opened for business in 2003. That’s more than 15 years ago. But next year? Palantir will be profitable.
Stephen E Arnold, November 19, 2019
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
Palantir Technologies: Gored by a Fact-Curious Bull?
September 2, 2019
A colleague forwarded me a link to “How CIA Backed Palantir Is Helping Police Root Out Thought Crimes.” Sexy title. It whispers to indexing spiders, “I am your friend. Index me, and we can kick back and talk about IPOs.” A couple of brief observations on this Sunday morning. Cue “Sunday Morning Coming Down.”
First, Palantir Technologies faces the same challenge other search-centric companies encounter: Generating sufficient payoff for investors. Not every investor is okay with losing a truck load of cash for tax purposes. The fix? An IPO. I am not sure that a single version of Palantir can pull this off. Therefore, it seems as if a company can be created to do Palantir’s “Let’s talk about what we do” work. Another company does the “it’s really secret” work.
Second, the CIA operates a venture fund, and that fund injects cash into a large number of companies. In that sense, Palantir Technologies is not unusual. The company was founded in 2003, and its technology is now behind the curve when compared to some of the newer investigative and intelware tools. Poke around Herzliya, and you will spot a number of “interesting” companies with much more zip zip implementations of the technology introduced decades ago by i2 Ltd. Yep, Palantir is what DarkCyber thinks of as a “me too” product, and that means more competition. Implications? See the preceding paragraph. Why does the CIA invest? Well, In-Q-Tel has not been delivering supported products which play particularly well with legacy systems or other tools in use. The investment helps make sure some basic compatibility and standard functions are implemented in a solution. Let’s not assume that meetings are the same as “telling a Silicon Valley whiz kid what to do.”
Third, the last DarkCyber heard was that the LA police department is indeed a customer. But the LAPD gets a bit of a discount and with budgets being budgets there is a possibility that LAPD will shift to another system. There are dozens of companies eager to provide Palantir type services within 30 minutes of Tyson’s Corner in Northern Virginia. But the problem with local police departments is that there are lots of them. But most of these outfits are strapped for cash, headcount, and cyber expertise. Selling more to outfits without much money to spend is not a recipe for success in DarkCyber’s opinion.
Fourth, the thought police angle is okay, but so far predictive analytics are useful up to a point. And that point is an unpredicted event, an outlier, or something that the 80 percent confidence analysis missed. Consider the performance of Predictive Policing and Palantir Gotham interaction in LA. There were problems because the data flowing into the system were like most data — not well groomed, house trained, and consistent. Therefore, neither PredPol nor Gotham turned cartwheels in joy when results were analyzed. Our DarkCyber video explored some of these issues in April 2019. Here’s a link to one in our LA Police Report series. Others can be located by searching this blog for DarkCyber PredPol.
Net net: Palantir Technologies is an important company. It faces challenges. How the firm figures out how to keep investors really happy, please stakeholders, and deal with the flow of better, faster, cheaper solutions from Israel and other countries are big problems.
Forget science fiction. Focus on the reality of the policeware and intelware markets.
Stephen E Arnold, September 2, 2019
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