(Bloomberg) – Palantir Technologies Inc. and International Business Machines Corp. are teaming up in a partnership that will dramatically expand the reach of Palantir’s sales force while making IBM’s artificial intelligence software easier to use for non-technical customers, companies plan to announce Monday.
The global partnership is the largest of its kind for Palantir, a maker of data analysis software whose shares have more than quadrupled since its debut in September on the New York Stock Exchange. Palantir gains access to a sales team of more than 2,500 people, compared to 30 today.
The relationship is the payday for the project that Palantir started more than a year ago to divide its integration and data analysis software into smaller and less expensive modules. The Denver-based company sells primarily to companies with revenues in excess of $ 500 million – many of which already have relationships with IBM.
Reselling Palantir software to augment the data and AI tools that IBM already offers and make them easier for more people to use was “a natural fit,” said Rob Thomas, senior vice president of software, cloud and data at IBM. “We are going to sell it to 180 countries and thousands of customers.”
Palantir’s software requires little or no coding, allowing less technical staff to use it, Thomas said. To expand IBM’s cloud and AI business, half of the revenue will need to come from partnerships like the one with Palantir. “This is a fundamental change for us,” he said.
Expanded Access
Without providing a timeline, Thomas said he hopes the partnership will help drive IBM’s customers who use AI to 80% of the current 20%.
Palantir’s chief operating officer, Shyam Sankar, said the technical adjustment with IBM and its reach are part of his company’s long-term effort to finally increase sales. In addition to commercial customers, government contracts increased in number and size during the pandemic.
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Started with funding from PayPal co-founder Peter Thiel in 2003, Palantir had initial success with US Central Intelligence Agency users and went on to sign the Department of Defense and the Internal Revenue Service, who respectively used the software to locate roadside bombs and hunting for tax fraud.
Government Contracts
More recently, the United States Department of Health and Human Services and the Centers for Disease Control and Prevention use Palantir software to help predict Covid-19 outbreaks, distribute protective equipment and distribute vaccines.
Although Palantir’s government contracts have grown – sometimes amid privacy and surveillance issues – the company’s commercial businesses have evolved more slowly.
Palantir last reported a total of 132 government and commercial customers, a concentrated group that includes BP Plc, Merck KGaA and Airbus SE. Early customers, such as American Express Co. and Coca-Cola Co., who experimented with low-cost software testing from Palantir and then abandoned them, are not necessarily at the top of Palantir’s list now, Sankar said.
“We hope to win back all these businesses over time,” said Sankar, adding that there is no “pride list” of former clients that she hopes to win back now.
Palantir reports the financial results for 2020 on February 16. A shareholder lockout expires three days later, releasing the remaining 80% of all shares that were not eligible for trading. Palantir’s shares rose $ 2 to $ 34.05 on February 5, giving it a market value of $ 59.3 billion.
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