Palantir Technologies Inc.‘s PLTR former CFO Colin Anderson warns that the company’s signature Forward Deployed Engineer model only makes financial sense for large-scale contracts, calling smaller implementations “lighting equity on fire.”

Anderson told TBPN that world-class engineers plus equity dilution create expensive overhead. “A world-class engineer plus their equity dilution is an expensive check. You have to be a capital allocator to pursue this model,” he said.

The economics don’t work for small-to-medium business contracts in the $20,000-$100,000 range unless serving as R&D for future productization. “Seven-figure contracts can support it; eight or nine figures definitely can,” Anderson explained.

Anderson emphasized that problem complexity drives model success. “The FD model is great in certain markets, terrible in others… you’ve got to be solving a hard enough problem,” he said during the interview.

Microsoft Corp. MSFT CEO Satya Nadella recently praised Palantir’s FDE approach as “fantastic” at a Y Combinator event, highlighting industry recognition of the model’s effectiveness at scale.

Anderson criticized founders who misunderstand FDE fundamentals. “Too many founders think of FD as a sales or customer success function,” he said. “If you’re looking at the FD model through pre/post-sales org charts, you’ve lost the plot. Start from first principles.”

Unlike traditional enterprise software companies like Salesforce Inc. CRM and Oracle Corp. ORCL, Palantir embeds technical experts directly with clients using its Foundry platform.

Palantir shares have surged over 409% in the past 12 months. The company raised 2025 revenue guidance to $3.89-3.90 billion while projecting adjusted free cash flow between $1.6-1.8 billion.

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