132-33 - Price for a Palantir server, priced per core. $141k per core. Includes 1 year of "maintenance" (support and software upgrades).
132-34 - This is the maintenance for second year on. $28k per core.
How many users can a core support? I dunno. But let's say you can serve 50 people off of a 4-core system (you can redo the math for the number of users).
You initial purchase is $564k. Or about $11k per user.
Each year after that, if you want software updates, it'll cost you $113k or or about $2.2k per year per user.
So let's say you use the system for 3 years. That's over $15k of software per user over that time.
Plus there's training ~$2k per user. Or another $100k in training costs.
And then who knows how many hours of engineering and "ninja" services. But a CONUS (within the U.S.) FSR is billed at about $300k per year for a full-time person on staff. Let's say you need two of them to support those 50 users.
Added up for 3 years of Palantir: $1.5million
I'll let you decide if that's good value, but that works out to around $30k per user partial TCO (not including power, security, networking, local IT staff support, etc.).
I've done a bit of work with Palantir. This is basically spot on. They're really cagey about the core/user requirement in real life so I'd be comfortable in saying most customer over purchase cores. They usually staff 2-3 full time guys for every 30-50 people and the implementation takes forever. I know of more than one place that didn't have a working system a full year after purchase. Meaning the maintenance had already expired on that first year.
Your later comment about the crack model is also spot on. There's a fairly long list of disgruntled places that bought on discount and are now being hit with huge O&M maintenance fees and are looking for a way out. I think they're government customers are slowly going away.
They're starting to show up more overseas here. Palantir recently opened up a Seoul office. But how much of whatever business they get out of it is government and how much of it is commercial is anybody's guess.
Sounds... Actually doesn't sound as bad as SAP, Europe's largest software package/manufacturer for... IDK, business software. IIRC, every implementation requires you to hire half a dozen SAP engineers for a decent hourly rate just to set up the system, then keep them on to train and maintain the system.
Former SAP guy here. Yup, on the surface Palantir appears to be cheaper and more specialized. Slightly different business model - Palantir does the software/hardware/implementation whereas SAP focusing mainly on software.
Yeah it kind of depends how you look at it. Is it specialty software that provides some critical function they can't get elsewhere? Or is it Microsoft Office, everybody gets it and it should really be like $150/seat.
I should have also added to my original post, this is their GSA schedule. For these specific line-items, the government considers this the "prenegotiated lowest price". This simplifies purchasing. So if somebody in the government wants buy another core (item 132-33) they just ring up Palantir or their GSA schedule VAR (reseller) and ask for a 132-33 volume:1 and they know that it'll cost $141k and be good for 1 year of O&M.
The downside of being on the GSA schedule is that it means that there are limits on your ability to change prices year to year to reflect a change in business environment. Say next year you want to drop the price by 50%. That's not allowed, since it would basically mean that you weren't selling your software at the lowest possible prenegotiated price. Similarly if you want to increase it, you're limited in that as well. I think the +- variance can't exceed 10% in a single 12 month period, but I might be wrong. The other downside is that this basically provides your prices in public so your competitors can see what you charge, which can be critical information in contract bids.
There's always a loophole. For example, convince your customer to not buy off of the GSA and sell them a "package" at some discount off of GSA. That "package" counts as a different SKU and the GSA doesn't apply. So for example, you could make a Palantir "starter kit" composed of
2 core license (normally $282k)
1 extra year of O&M maintenance for both cores (normally $56k)
500 hours of Ninja Services @ $150/hr (normally $98k)
500 hours of CONUS FSR Service @ $120/hr (normally $73k)
all for the grand total of $350k or some such, instead of the normal price of $510k. A $160k discount.
Any government purchaser would fall over themselves to try to make this happen since it's a >30% discount off of the normal GSA schedule prices (which they can refer to and are governed by various rules). This looks fantastic on their yearly performance eval "-saved government $160k on purchase of Palantir package deal"
This is the crack model. When the O&M runs out in two years and they come asking for more, well, there's no deal anymore, and the GSA schedule prices on O&M and people have gone up 20% in that time.
edit keep in mind that this company has raised almost a billion dollars and is valued at something like $9 billion dollars.
> raised almost a billion dollars and is valued at something like $9 billion dollars.
And now particular plans to sell or go public. This keeps all their financials private and the fact that they have to keep doing new fundraising rounds every few months does not make me think they're making money. At $9bil valuation, finding a buyer is going to be really tough.
They're a really weird company to deal with too. A bit cultish, the CEO is kind of flake the few times I've met him at their conferences. I get the impression that he's not really running the show, he's impossibly unqualified with zero history in any of the spaces they sell into and no business background of any useful type.
Their offices are nice, loads of free great food, but when people emerge from their offices for lunch it looks like they're on a death march. If you ask any of them if they like it there you'll always get a blank stare and a "I love it at Palantir, Palantir is great" answer.
Combined with the track jackets and sketchy legal history (well worth a read), it's kind of off-putting.
They essentially defrauded their chief competitor, i2, so that they could copy their features and reverse engineer their software so Palantir's system could integrate with it.
eldemar is providing some of the information. I'd add some color the i2 suit.
The fraud perpetrated by Palantir was actually so organized and so bad (they set up an entirely fake front company in another state), that the suing company asked the judge for the case to be tried under RICO rules...which are basically rules put in place to fight the mafia. The judge agreed that it qualified under the law (immediately tripling any damages that would have been awarded) and Palantir settled with i2 immediately after that and the case was dropped.
Word on the street is the settlement was for an almost 9 figure sum and Palantir immediately went into another fundraising round to cover the loss and sustain operations.
The employees (all senior execs) at the center of the fraud kept their jobs but didn't show their faces in public for a couple years (they had been acting as a de facto spokespeople during trade events). They're back in the public eye now.
Yes, that's correct, Palantir is currently run by people who's activities were qualified by a judge as falling under legal guidelines setup to fight the Mob.
You can say what you want about the big defense contractors, incompetence and lobbying and all that (which Palantir does in spades and has even gotten in trouble for not disclosing some lobbying deals) but mafioso they ain't.
This isn't even touching the HBGary union busting scheme and the Bank of America anti-Wikileaks proposal. And other very anti-democratic activities.
I don't know what happened to the employee with the anti-Wikileaks deal, but the one with HBGary was the stuff of dystopian nightmares. The employee responsible was publicly terminated but actually it turns out was just sent away for a bit and then quietly either rehired or just turned back up to a job he never lost. Nobody would have ever known about this if Anonymous hadn't had a very public fight with the CEO of HBGary Federal and hacked their network to pull down some documents, revealing an ongoing 3-way partnership with Palantir).
"such as former head of the National Counterterrorism Center Michael E Leiter who had said to himself “There’s Karp with his hair and his outfit—he doesn’t look like me or the other people that work for me,” before becoming a supporter and then consultant for Palantir"
and heavy lobbying (which explains some of the bizarre support they get in congress while the generals go blue in the face arguing against them)
"It has also been active in formal political lobbying, recruiting former senators John Braux and Trent Lott, (5) with its lobbying expenditures increasing steadily from 2010 to 2013 when its total annual investment exceeded $1.1 million"
I'm always surprised how cheap it is to buy politicians. I would expect a company like Palantir to spend much more than 1.1 million on lobbying. Does anybody know how much the 'consultancy fees' to former government officials are in total?
If you think Palantir spends a lot on lobbying, check out how much Boeing, Lockheed, and other multi-billion dollar contracting companies spend on lobbying. $1.1mm is probably what they spend on food in a month.
I would assume they wouldn't need to lobby since there's probably no competition or no required item appropriations for what it is they do. Any advocacy would probably be directly to agency consumers and there's no explicit lobbying involved (although there may be something to be said about the revolving door quid pro quo between government/private sector).
I was involved in a Oracle Financials implemention a few years ago. Forget about the Oracle part... the IBM/Tivoli garbage used to monitor the IT systems cost about $1M in licensing alone!
They sure have chosen their preferred client industries of Government and Financial Services wisely then. Those industries (a) are accustomed to paying that much for their technology, and (b) are very unlikely to leave your platform once you start using your wares, since the difficulty of getting them as a customer in the first place (and how slow they move and how much paperwork / due diligence is required) directly translates to difficulty for them to move off of your system.
there's a fair amount of vendor lock-in in this space as well and Palantir is pretty good at it. They talk quite a bit about open standards and what not. But moving off of their platform and onto one of the competing ones is basically impossible.
They've done a fantastic job at disrupting the link-chart market (which is surprisingly robust) and making it seem like customers are buying something else, but at 2-3x the price of the competition. They hide their sales guys as "forward deployed engineers" and obfuscate their sales process to the point where it doesn't seem like you've ever dealt with the kind of sketchy enterprise sales goon you'd deal with from any of their competitors.
I'm not comfortable going one way or another on Palantir, but...
> They hide their sales guys as "forward deployed engineers" and obfuscate their sales process to the point where it doesn't seem like you've ever dealt with the kind of sketchy enterprise sales goon you'd deal with from any of their competitors.
Really? I've known a couple of forward deployed engineers there, and I assure you, they're not salespeople.
Here's a long thread on just this topic here on Hacker News. One of their senior engineers jumped in to "clarify". It's worth reading the entire exchange.
I think these days they've deobfuscated the roles a bit. But back during this discussion, they were definitely hiring and mixing in sales people with their "deployed" engineers. Most of these guys would probably be sales engineers somewhere else, relegated to a life of doing canned demos for commission scraps.
It's actually kind of smart from a sales POV, embed your sales guy in the government site, call them engineers and let them have unlimited upsell opportunities.
You've basically tricked your customer to put one of your sales guys on staff.
From a customer POV, when you figure out the guy your paying $300k/yr to have on-site is just triaging issues and calling in real engineers to spot shoot issues, then spending their downtime trying to sell more software inside your organization it's kind of irritating.
I worked at Palantir for a number of years, and was heavily involved the hiring of Forward Deployed Engineers. The vast majority of FDEs did serious software development. There are only a few people I can think of who were not engineers, and their presence on deployments had to do with the alignment between their analytical background and the customer's focus.
The FDE's shouldn't have been doing any core software development unless it was some kind of bespoke one-off code, some kind of helper app for a specific SAP program or something, and that software, code and all, now belongs to the government.
They should have been doing implementation and FSR duties. If they were doing core product development while on Federal Contract, the government owns that software now. If it hasn't been turned over, source and all, it could be grounds for an IG investigation.
That is very serious stuff, so I hope you can qualify what you mean by "serious software development".
As for FDE's doing sales, just look at the current job openings. The BD team is full of FDE openings. What exactly do you think those FDEs do on the sales team?
Since everybody who touches the customer has the same title (except for Mission Specialists), it's easy for Palantir to start a deployment with non-sales FDE's, then swap them out for sales FDE's and start working the organization.
It's sketchy, but it's super smart if they're careful about it.
The thread is interesting. I do wonder if these reports are outdated, though. The people I know with that job title don't do sales. And I've met a few of them by now.
No, it's still current. If you take a peek at their careers page and look on the Business Development Team (that's the sales and partnership team) openings, it's chock full of Forward Deployed Engineer positions.
I am not sure I see the brilliance in their actions. It's rather expected. Not only is what you described true, but government and finance are also the main two sectors that are most interested in violating and usurping through unfair advantage and full spectrum tracking and monitoring.
And not just enterprise sales but GSA Schedule sales, which is even more hoops to jump through but there is a huge payoff if you become a government vendor. It's not free money or anything, they're a tough customer, but you won't go broke doing it ;)
The alternative to Palantir - an alternative enterprise bespoke system or one built by the companies' or Gov's IT department - costs a whole lot more (25x) and often doesn't work! Palantir is a great value.
I presume you're talking about the DCGS-A system. Palantir has done an expert level job confusing the public on this.
That system definitely has problems (it's terrible and sucks in many places), but it's a system of much larger capability and complexity than Palantir.
Comparing Palantir to it is like comparing a wheel to a an entire transport system. Palantir could comfortably fit in as a single capabilty in DCGS-A (and probably do a better job than the stuff currently filling in that role), but it could never replace it.
It's basically just a federated search, mediocre map and halfway decent link-analysis tool. But ask it to do anything even remotely outside of those three things and you're basically dead in the water as it doesn't offer anything relevant to all the other millions of things DCGS-A provides. DCGS-A is more than just some analytic tools.
The reason it's not part of DCGS-A is very political and complex and as much Palantir's doing as the Army's, but the answer is that the components that are on DCGS-A that basically do what Palantir does were selected because they're cheaper over the long run, even if a bit clunky. For example, on the client side, there's presently a forward looking mandate from big Army to drop flash and java clients (because they're an IT administrative menace). Palantir's front end is Java.
> there's presently a forward looking mandate from big Army to drop flash and java clients
I would feel way safer if the IC & military disabled Flash & Java in their browsers, along with the rest of the web. Those two plugins have shaped up to be quite the vehicles for zero-days.
132-33 - Price for a Palantir server, priced per core. $141k per core. Includes 1 year of "maintenance" (support and software upgrades).
132-34 - This is the maintenance for second year on. $28k per core.
How many users can a core support? I dunno. But let's say you can serve 50 people off of a 4-core system (you can redo the math for the number of users).
You initial purchase is $564k. Or about $11k per user.
Each year after that, if you want software updates, it'll cost you $113k or or about $2.2k per year per user.
So let's say you use the system for 3 years. That's over $15k of software per user over that time.
Plus there's training ~$2k per user. Or another $100k in training costs.
And then who knows how many hours of engineering and "ninja" services. But a CONUS (within the U.S.) FSR is billed at about $300k per year for a full-time person on staff. Let's say you need two of them to support those 50 users.
Added up for 3 years of Palantir: $1.5million
I'll let you decide if that's good value, but that works out to around $30k per user partial TCO (not including power, security, networking, local IT staff support, etc.).