Palantir + Google = Working with Russia and/or China?
International Relations Re: Google and Palantir
Is foundry going to be accessible to other countries that normally Palantir wouldn’t sell directly to? Thiel has been very specific about how he feels about Google - not great. Karp has hinted at his feelings towards Google, as well as similar companies that do business with other countries yet do not justify not doing business with the US government.
Palantir has been clear that there are a select few countries that they will not work with - period. There may be workarounds for certain clients/jobs, but that is taken on a case-by-case basis. They have decided that bringing their technologies to these countries is not possible.
This is not necessarily a setback, however. Looking at China for example, lots of silicon valley companies have compromised their position when going into China - but China still has their own ‘valley’ with their own tech giants. China does not want to harbor these tech giants, they want to take them outside the country.
The US sees China as a pariah and a country to avoid working with, but other countries do not necessarily feel the same. By not working with China, Palantir has made a strategic decision to capture other markets. Palantir made this choice because they want to make a clear distinction that allows them to access some of the most critical defense business.
The opportunity may not be as much of a concern as we thought, but the execution is still up for debate.
Google Needs a Helping Hand
As of late, Google is in a tough spot and needs to make some drastic changes. Last year, Azure’s YOY public cloud adoption rate growth was 60% more than Google, and was marginally higher than AWS. If Google managed to increase 60% of their adoption rate, they will meet Microsoft of last year.
In short, they are not competing with Palantir at this time.
What’s so great about Foundry is that you are able to choose what you would want in a particular hyper-scaler. If you already have content in GCP, Azure, AWS, Snowflake, etc. you could pump those pipelines straight into Foundry. You could build it all anew in Foundry and your metadata would be intact - with no additional cloud computing cost.
This is a major difference with Google and Palantir, and if your company is pressed for cash, Palantir would be the obvious choice here.
On the Palantir and Google websites, there is a focus on how their partnership is going to solve industry specific challenges, which is important for consumers to see and understand. We saw this with the Trafigura partnership, with Rubicon with waste management as their focus, and with others. The success of this partnership hinges on them being able to have Foundry archetypes for specific industries, and tailoring it to the customer’s needs.
If done successfully, this will undoubtedly lead to more contractor and partner use.
More contractor/partner use will lead to global network effects. Already there are financial and retail use cases for Google Cloud, which is strategic and encouraging.
Another piece of this puzzle lies in Google’s AI. They have one of the best on the market, but it is not used in the B2B sector nearly ever. Having access to their AI’s data and training will be a great boon to Palantir. Google is great at using their AI for internal use, but they have not successfully commercialized it at a level where they want, because the data in the industry/client is not managed to the same caliber that Google is managing their own data.
Companies Want Security - Palantir Has Security
On-prem topics are completely being ignored and a lot of companies are moving operations back on-prem because they don’t want to be wasting money when the prices of storage and compute have gone down so drastically. They see that they can use virtual machines, load all client apps onto them, internally manage those themselves, and provide the same level of service.
AWS is not always easier (or cheaper). There is so much cyber warfare that happens every day that is unseen by those outside of IT departments. Critical infrastructure is being brought back from the Cloud to on-prem in order to better protect it. Critical infrastructure needs to be locked down, then whatever companies can be flexible with is then moved to the Cloud.
For example, Lyft ran up such a high AWS bill that they were forced to pay a 300 million dollar clause to lock down their contract. Their contract was growing exponentially, and Lyft fought back saying that even though Lyft will keep growing, it is unreasonable for the contract to grow at the rate it was.
Essentially, it’s hard as hell to move out of AWS or Azure once they’ve sunk their claws in. Will people move their AWS information to Foundry? No, they will open up a nice data pipeline and send it, and everything else will get built around it on Foundry.
Palantir is a security-first business. Companies understand this and are looking for this as a primary draw. Time will tell if more companies use Palantir for this reason.
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