Vendors asking forward deployed engineers to make good on trillion-dollar AI bet

During a flight on Marc Benioff's private jet last year, the Salesforce CEO apparently subjected his company's senior execs to a four-hour montage of Palantir CEO Alex Karp holding forth on the value of forward-deployed engineers (FDEs).

The experience - which might have led anyone else to seek the emergency exit - was a lesson for Michael Spencer, Salesforce veep for finance and strategy, about the value of FDEs in boosting sales at Palantir, whose mantra is "land and expand."

He shared the anecdote with the Deutsche Bank 2026 Technology Conference in August, just as the FDE boom was reaching fever pitch.

For the uninitiated, vendors send FDEs to clients without tying them to a project. Effectively consultants-without-portfolio, they are expected to build something valuable, at speed, using their technology. The term is not new - Palantir claimed to have come up with it in 2007 - but the explosive growth of investment in FDEs, and their attachment to AI implementation, provokes questions about the benefits and risks involved for tech buyers.

Earlier this month, AWS announced a $1 billion investment in a new Forward Deployed Engineering unit which aims to help customers build and deploy AI systems. AI poster-child Anthropic has also announced a $100 million investment in training FDEs. SAP, Salesforce and Workday - in partnership with Accenture - are heavily invested in the idea too.

Salaries are on a commensurate upward trajectory. According to Levels.fyi's Forward Deployed Engineer salary data, the US median annual total compensation was $216,250, with the 25th percentile at $180,000 and the 75th percentile at $290,000.

The tech industry has an obvious problem to solve with FDEs. It spent around $1 trillion on AI last year, according to Gartner, and is set to see that figure grow by 34.7 percent in 2026. Broadly speaking, it expects to claw at least some of that money back from customers.

The tech industry claims the advent of FDEs also benefits customers by helping them to access AI engineering skills, which are in short supply. Benioff told an earnings call in December last year that customers working with its FDEs were deploying Salesforce's AI technology 33 percent faster than those who were not.

Nonetheless, Gartner has warned that, done badly, reliance on vendor FDEs for every change and iteration creates enormous lock-in. There is also a risk the process can leak customer intellectual property, and with it, competitive advantage.

Mukul Saha, software engineering senior director at Gartner, told The Register: "The FDE engagement, generally, is that a company has an AI product and goes to the end user site, and part of the deal is they're going to be learning things as they implement. They're going to take back certain knowledge that makes the product better. But there's a fine line."

There is a risk that those benefiting are the users' close competitors, as FDEs share information.

Could an FDE be taking the user's competitive advantage and passing it on to others? Saha said: "That would be a complete violation of the IP, right? That's how fast things are moving. This is a concern I hear as I interact with end user clients."

Then there is the risk of vendor lock-in. Gartner has warned that if FDEs become indispensable - because only they understand the workflows they built - keeping them full-time as consultants is neither economical nor strategic.

"We're actually advising clients to understand the use cases they are going to be implementing well before FDEs come on site. If you're doing an FDE engagement, figure out the exit strategy. Customers should figure out how they're going to be taking over once the FDE resources go," Saha said.

However, in its advisory research, Gartner said that if FDE engagements have clear guidelines on governance, business value delivery, IP ownership, project co-ownership, knowledge transfer, and an exit strategy, they can be valuable. They can get projects to production faster and increase the chances of return on investment.

Where the FDE is attached to a set of products already sold to the customer by a major enterprise software vendor, there is also the difficult question of licensing and commercial arrangements.

Here, users need to be careful, because these issues may not be on the FDE's radar during projects, said Craig Guarente, founder and CEO of Palisade Compliance, a software licensing advisory company.

"They don't care about it. They're not even checking licensing. They're not checking tokenization. They're not checking what the customer is paying for or what the commercials are. Again, it is up to the user. It's up to the buyer of the software, of the AI tool, to make sure that what they're doing is in line and meets their expectations," he said.

Customers with open-ended contracts with the supplier could be "really exposed" if they don't understand what FDEs are doing.

Similarly, those with capped usage could find they reach their limits and have to pay for more usage, he said.

Users should also be aware that it is possible FDEs could share their software usage and IT strategy with their home vendor, Guarente said, adding that he had seen no direct evidence of this practice.

"Companies have a huge incentive to make sure customers turn [features] on, because if they don't, vendors can't recognize the revenue. Then, if there is a variable commercial contract, from a corporate level there are huge incentives [to get customers to use more]," he said.

Similarly, there is a risk of sharing customer information within the vendor's sales and audit departments. Guarente told us:

"If you were a company and you make money from licensing your IP, why wouldn't you do that? It just makes sense. It is not just the audit department, but the sales team, customer success team and support organizations. The FDE is, like, I did this for this company.' Now they set up the next step, which could be a sales conversation or just more education. Who knows? But if I was running an AI company and I had these engineers deployed to get customers to turn on and use my stuff, that would be my first step. Let's get them hooked on it, and then ask how to generate more revenue. Obviously, one of the ways is to make the stuff better."

As the tech industry strives to claw back its gargantuan AI investments, it is following Palantir's lead and adopting the FDE strategy. Customers need to be aware of how it works and ensure they maintain control of their own AI plans. (R)