Small Deals Are Better for Palantir Right Now
A company with revenues that are smaller than many of the contracts Palantir has been securing in the past several months, could prove to be more impactful.
Integrity Mold and Tool is a smaller company. A company doing $230 million Canadian dollars in revenue is not necessarily a Fortune 500 company. it's not a Fortune 1000 company.
$230 million dollars is not an easy thing to do in revenue by any sense of the imagination, but it's not the typical client that Palantir works with. This contract could signal that Paantir’s go to market strategy is shifting, they're going a little bit more mass market.
This is not the first contract with a smaller Institution or company. Earlier this month, they expanded a deal with Tampa Bay General Hospital.
David MacNaughton, president of Palantir Technologies Canada says:
“Our partners at Integrity recognize that software and Technology are key for North American manufacturers to compete globally and to preserve manufacturing jobs”
“This partnership shows how our cutting-edge technology can benefit companies of all sizes, and we are proud to support Integrity’s pursuit of excellence.”
They're trying to get deals with companies and organizations that aren't maybe $100 million dollars each. But rather a $10 million dollar deal over five years, maybe it's a million dollar deal over two years. The exact numbers are speculation, but hopefully the premise is clear.
On average a deal with Palantir has been six or seven billion a year.
Just like with investing, and in personal finance, it is safer to have multiple streams of income than compared to only one. Companies that are completely reliant on one organization to stay afloat come with inherent risk. Even if that risk is the US Government.
Would rather Palantir have a hundred thousand clients that are anywhere from $100,000 in revenue to $500 million in revenue. Versus only 10 clients that do $5 billion in revenue. Obviously you want to have a more mass market product because that leads to the scalability and the eventual accentuation of more and more customers finding out about your product.
Potentially even developing a product that could go to consumers, I don't think that's gonna happen but you want to be a more well-known brand.
Salesforce is everywhere, Snowflake is everywhere, and it has its advantages. If Palantir could get to be as well known as any other software company, then they would naturally be in the conversations for company expansion without having to spend as much on marketing.
This is what Alex Karp and Peter Thiel, co-founders of Palantir, had initially wanted to see.
They believe Palantir has technology that provides differentiation in the marketplace. Softwares that are 10,000 times better, that do fundamentally different things. That's amazing, but can you get the entire world to use those things is the real question.
The answer is no, not if the world doesn't know you exist.
How do you get the world to know about your product?
Simple, when the local grocery store that maybe only does 2.5 million in revenue, uses your product to help expand and triple their revenue over five years. Using Palantir Foundry to make better decisions.
When Entrepreneurs not running global fortune 500 companies are discussing Palantir then it will be at scale to not have to worry about marketing as much.
Deals such as this one with Integrity Mold and Tools from Canada, are acting like stepping stones to help get us closer to that potentiality.
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