| 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. |
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.