Episode description
Episode description
About Corey Quinn
Over the course of my career, I’ve worn many different hats in the tech world: systems administrator, systems engineer, director of technical operations, and director of DevOps, to name a few. Today, I’m a cloud economist at The Duckbill Group, the author of the weekly Last Week in AWS newsletter, and the host of two podcasts: Screaming in the Cloud and, you guessed it, AWS Morning Brief, which you’re about to listen to.
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Corey: Welcome to the AWS Morning Brief. I'm Cloud Economist Corey Quinn, And this is the Whiteboard Confessional segment that has increasingly been taken over by my colleague, Pete Cheslock, as we tear through various cloud-based companies, public filings as they race to go public and inflict their profits, or in more cases, losses on the public markets. Pete, thanks for joining me.
Pete: I am super happy to be back again, and making my mother happy that I'm actually using that MBA that I spent all that time to get.
Corey: So, we could wind up talking just about how Palantir is awful in a variety of ways. My personal favorite was the letter that their CEO attached saying that effectively engineers were stupid and didn't see the big picture, which is a weird thing to say about a whole group of people you're actively trying to hire, but all right. Let's talk about their S-1 filing. This has been anticipated for a while. What do you think?
Pete: Well, Palantir has been around for a very long time. I think it's been around a lot longer than a lot of people realize. You know, early 2000s. It was technology built to tie data together and to be honest, I only know—I’ve ever heard of one company actually using Palantir—the technology—a commercial company. They were actually using it as a SIM—SIM, whatever you want to call it—Security Information Management System—
Corey: Event management or something like that. Yeah.
Pete: Exactly. And ironically enough, that company actually—that was using Palantir—replaced it with an Elasticsearch ELK stack, which I thought was fascinating. I know nothing about their software, but I was very fascinated to read the S-1 because there's been this mythology around it and you can hear so much about insiders at Palantir, employees selling their shares in this wide secondary market. So, I was very curious to see what we were going to find, and there are definitely some interesting bits within.
Corey: There certainly are. And it's strange because for a while Palantir was doing interesting things in the market. They were offering $20,000 referral bonuses to people who referred engineers in for certain roles, and you didn't have to be a Palantir employee to do it, which was fascinating. They've recently moved headquarters from Palo Alto over to Denver, Colorado, which… okay. They are claiming it's for this whole lofty mission. Let's not kid ourselves: it's a tax play. [laughs].
And there's also a whole bunch of interesting stuff buried in here. But yeah, in many ways, this is a legacy company in some respects. It's been around almost 20 years. And strangely, I don't know about you, but I don't know anyone who works for Palantir. I did a little digging in preparation for this episode, and it turns out, I actually kind of do, but they're very quiet about it. It's one of those things where people don't want to be called out for working at a company that is this particular flavor of controversy, and I can't say I blame them.
Pete: Yeah, I haven't looked through my LinkedIn to see if any of my connections have ever worked there. Granted, it's such a West Coast company that me out in the East Coast, be pretty rare to run into anyone out here who's kind of taken their time and done the Palantir. I have heard, again, the rumors that they've always paid very well, and—
Corey: They would kind of have to.
Pete: You know, in the Bay Area, you kind of have to. And competing for talent against other places who pay really well, like Netflix, and Uber, and all these other big companies that are out there. So, it's a big competition for the top talent.
Corey: Oh, yeah. And most of what they do is data analytics. They take in a whole bunch of data, and they crunch a whole bunch of numbers and come out with other stuff. Historically, they have been focused on selling their services to governments, but now they're expanding in the enterprise story as well. And that is, of course, going to be a bit of a challenge for them as they expand into it, but we can talk about what they do, how they do it, and all the other challenges. Let's talk about Cloud. What do we know about their cloud environment based upon their public filing?
Pete: Well, they talk about their commitments. So, this is something you often see in S-1s of their various cloud commitments, and I think this one was super interesting in that they listed commitments for about $1.5 billion in cloud commitments over six years, and this was an agreement they entered into at the end of last year. Just a massive, massive amount of cloud spend commitment, right?
Corey: Yeah, it’s a quarter billion dollars a year in spend. Which is, again, we see a number of customers in that range pretty frequently, it's not always typical to see the better part of a decade done to satisfy those commitments, though. Usually they're, “Well, this stuff is always changing. Let's talk about doing this for the next three years.” Six is a bit on the outside range of what we tend to see.
What's fun to me was the breakdown of that commitment, which was just—I've been using this as a talking point for a week now—which is they have to undisclosed cloud companies in this part. They mention elsewhere that they use Azure and that they use AWS. Great. Fine. For one cloud provider, they have a six-year commitment of $1.49 ...