Oracle-Palantir Partnership

By Patrick Moorhead - April 10, 2024

The Six Five team discusses Oracle-Palantir Partnership

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Transcript:

Daniel Newman: Let’s talk about a new partnership that’s taking place between Oracle and Palantir. The interesting thing, Pat about Oracle and Palantir, which maybe kind of fits somewhat nicely with my early… Is they are very focused on Western interests. These are two companies, Alex Karp, the CEO of Palantir has been criticized and even has seen employees leave for his outspoken support of Israel. We know we’re in a very complicated global moment right now in Gaza and what’s going on there. Oracle and Larry Ellison’s always been very supportive to Western interest. If you remember when TikTok was originally potentially being spun off, it was Oracle that was actually potentially going to take over, move all the data into their US data centers.

They obviously are very supportive on the database side, they’ve got massive government contracts with almost every government institution. They are the database of the US and most of the West. Of course, SAP has got a lot of Europe to be very, very clear. But another company that talks about foundry is Palantir, but Palantir’s not talking about foundry in the ways that we’re talking about it with data centers. They’re talking about it with cloud and workloads and applications all being brought into a common ecosystem.

And so what they basically are doing is they’re moving some of their, “Foundry” workloads to Oracle and that they’re going to make their Gotham and AI platforms deployable across Oracle’s distributed cloud. I think this is really important from a security defense and intelligence standpoint to win those customers. Oracle has shown a lot of strength there. They’ve got global relationships with regionals, with other big data center companies so they’re able to offer the regionality that you need that some of the other big cloud providers offer, but also offer it within the context of Oracle security and privacy and data commitments.

The way they position themselves, Pat, is that they are the hyper scale that is basically able to do AI and cloud for government anywhere in the world. So that is how they’re positioning themselves. And for those that aren’t following Palantir closely, Palantir is a analytics and AI platform that basically had come to market as the platform for defense. That is their position in the market. Now, their analytics tools are very powerful and could be used for a lot of other things, Pat, but that is what they came to market. That is how they’ve differentiated, and I think there’s been a lot of enthusiasm about the company, albeit it has been somewhat controversial. I don’t know if you remember their CEO recently talking about short sellers, short selling his stock so they could buy their coke. That’s a true story, everybody. It happened, it was on CNBC. But you know what?

I like controversial. I like CEOs that are willing to say what’s on their mind. I like the fact that they’re willing to be ambitious and aggressive. And by the way, the CEO now, the CTO and chairman of Oracle has never been one to mince words about what he thinks about the competition and what they’re doing. So basically Pat, long and short, what you have is two companies that have long staked themselves on being very, very capable to support federal interest, defense interest and offer their technologies to come together to give new capabilities with the defense industry in mind. But of course, it’ll also be something that I think will drip into commercial. It’ll drip into a broader government and it won’t just be for defense, but sovereign cloud’s a real thing, Pat, and this is addressing some of that sovereign cloud requirement.

Patrick Moorhead: Yeah, great analysis, Dan. So I want to read this paragraph that was headlined in CEO, Alex Karp right after a video he did. “The dominant nation states and companies that define our way of life will be the ones that get software and use of data right. Getting this right is a requirement to preserve our way of life, enable society to thrive beyond a few dominant organizations. I.E. countries.” So yeah, it’s defense, it’s government. They’re getting into increasingly into healthcare, National Institutes of Health as an example. I think culture on partnerships have to work, and I believe that the culture between Oracle and Palantir is perfect. OCI Gen 1 was not good. It was uncompetitive, it was overpriced, it was bad. OCI Gen 2 is very competitive.

In fact, they’ve got a really interesting pricing model versus AWS, where Oracle price is very low for entry level base infrastructure, whereas AWS prices it higher and AWS’s add-ons are lower. Where OCI’s add-ons are higher priced. So it’s a really interesting pricing model. I’ve said this before, their version of sovereign cloud and on-prem cloud is the absolute easiest to understand. It’s essentially take what was in the cloud and put it on-prem, put a chain link fence around it, run every Oracle app on it, including database and do it as a service. And then sovereign, right? They’re very clear about locations, badged employees in that country. It’s just very simple as opposed to the other cloud providers have a little harder time explaining that. So to me, it’s a good match. It’s very straightforward.

Daniel Newman: All right, that one’s good, Pat, by the way, I love the language I was looking up the way Palantir describes its foundry, it says, “It integrates the semantic, kinetic, and dynamic elements of your business.” I’m going to need to go back to college.

Patrick Moorhead

Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.