Palantir Technologies: On the Runway for a Trillion Dollar Take Off?

November 29, 2021

Palantir Technologies is an interesting company. Its technology is a combination of 2003 legacy innovations, some open source goodness, and 18 years of working hard to put a fence around policeware, intelware, financial fraud, and a handful of other markets. It sure seems to me that The Motley Fool, who is neither motley nor a fool, believes that this financial benchmark is a possibility; otherwise, why write the story? PR, stock churn, controversy, to catch the attention of observers and sideline sitters like myself? I don’t know, but with Apple putting the PR in PRivacy, who knows?

The premise is interesting. I noted this passage in the Motley and Fool write up called “Will Palantir Be a Trillion Dollar Stock by 2042“:

 Palantir is valued at $41.3 billion, or 27 times this year’s sales.

Good but with unicorns being birthed with Malthusian energy, there may be some boundaries on Palantir’s ambitions. (I will mention a couple of them at the close of this blog post.)

The write up also states:

The company expects that growth to be driven by its new and expanded contracts with government agencies, as well as the growth of its Foundry platform for large commercial customers. The accelerating growth of its commercial business over the past year, which notably outpaced the growth of its government business last quarter, supports that thesis.

I noted this statement, which I find somewhat amusing:

The company has gained a firm foothold with the U.S. government, but it still faces competition from internally developed systems. Immigration and Customs Enforcement (ICE), for example, has been developing its own platform to replace Palantir’s Falcon. If other agencies follow ICE’s lead, the company’s dream of becoming the “default operating system for data across the U.S. government” could abruptly end.

I assume that Messrs. Motley and Fool know something about government procurement, why US and EU agencies license multiple systems, and stimulate internal innovation. Yep, I am thinking about DoD incubation centers and 18f. To Motley’s and Fool’s analysis, I tip my fake fur hat to the mention of Amazon as a competitor. Many don’t understand the scope of Amazon’s government services, and probably if told, still wouldn’t grasp the online bookstore as provider of streaming business data and slick AWS blockchain tools.

Let me share some of the hurdles that the galloping stallion has to clear after 18 years on the track:

  1. The NSO Group dust up has changed the table stakes for policeware and intelware outfits which seek to expand into commercial markets. The impact of NSO Group has been biting Israeli firms, but who knows what will happen tomorrow. The past is not a reliable predictor in today’s flash mob environment.
  2. The newer methods developed since Palantir opened for “business” are impressive. Many are more capable than Palantir because many tasks with which a trained Palantir forward deployed engineer must engage are point-and-click. Check out Datawalk, Sphinx 12, or a few of the Tel Aviv based outfits’ methods. (A ton of Voyager insider information has been dumped online courtesy of FOIA and the LAPD.)
  3. Crime is rising, but cyber crime in its multiferous manisfestations is sky rocketing. That means that the vendors pitching solutions could face buyer remorse. What will some of those who find that nifty smart software is not too much of a barrier to novel exploits engendered by the good enough software approaches of Google-Android type coding or Microsoft cloud-type engineering? Maybe some big time litigation?

Net net: From my perspective Palantir Technologies is an intelware and policeware outfit which has to deal with upstart competitors, tough to predict regulation and trade controls, and the looming shadow of buyer remorse which will fall across the cyber intelligence sector and hit vendors indiscriminately.

A trillion dollar outfit? Is there an NFT for Seeing Stones yet?

Stephen E Arnold, November 29, 2021

Comments

One Response to “Palantir Technologies: On the Runway for a Trillion Dollar Take Off?”

  1. Palantir at the Intersection of Extremists and Prescription Fraud : Stephen E. Arnold @ Beyond Search on January 5th, 2022 5:15 am

    […] the rah rah write-up’s line about Palantir’s “success on the battlefield.” Chapman is not the only one enthused about the government-agency […]

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