Traditional PS vs FDE

The Honest Difference Between FDEs and Traditional Salesforce Professional Services

What’s Actually The Same:

You’re correct that Salesforce has run professional services at negative gross margins ($44M loss on $2.33B revenue in 2024) as a deliberate loss leader strategy. Both traditional PS and FDEs:

• Embed with customers to drive software adoption

• Customize implementations beyond what the product does out-of-box

• Exist to increase subscription revenue and retention

• Are expensive, customer-facing technical resources

What’s Actually Different (And Why It Matters):

1. Reporting Structure & Incentives

Traditional PS:

• Reports to Professional Services/Consulting org

• Measured on utilization rates (70-85%), billable hours, project margins

• Compensated on project completion, scope management

• Goal: Deliver the project profitably within defined scope

FDEs:

• Report to Product Engineering (critical difference)

• Measured on customer outcomes, product adoption metrics, feature requests generated

• Compensated on customer renewals, expansion revenue, product insights fed back to engineering

• Goal: Make the product work for the customer AND improve the product for all future customers

Why this matters: At Palantir (the FDE originator), FDEs built entirely new product features when existing tools weren’t sufficient. They literally contributed code back to the core platform. Traditional PS consultants would scope change orders or punt to product roadmap.

2. Time Horizon & Depth of Engagement

Traditional PS:

• 3-6 month implementation projects

• Defined scope, handoff to support/CSM

• Breadth play - touch many customers with standardized methodologies

• Accenture/Deloitte model: fly in, configure, train, leave

FDEs:

• 6-18+ month embedded engagements (sometimes indefinitely)

• No hard scope - iterative problem-solving until outcomes achieved

• Depth play - fewer customers, but extreme customization

• Example from research: Salesforce FDE pods work full-time with one client for ~3 months for a single use case

3. Technical Bar & Authority

Traditional PS:

• Mix of skill levels (analysts, consultants, architects)

• Configuration-focused, use existing platform capabilities

• Escalate technical blockers to product team

• Typical rate: $150-300/hour blended

FDEs:

• Senior+ software engineers exclusively (Palantir hired “the kind that could work at Google”)

• Write production code, build custom integrations, architect new solutions

• Empowered to build whatever is necessary - even if it contradicts existing product

• Typical comp: $200-400K base + equity (vs. PS consultant $100-180K)

From the research: “At Palantir, we hired top-tier software engineers – the kind that could work at Google or Facebook or wherever – as FDEs, because they were there to build systems, not just tweak them.”

4. The Product Feedback Loop

This is the clearest differentiator:

Traditional PS:

• Customer requests → “That’s not in scope” or “Submit feature request”

• Insights maybe documented in post-project review

• One-way street: PS delivers what product built

FDEs:

• Customer requests → FDE builds it immediately (if feasible)

• Working code becomes product feature for all customers

• Two-way street: Product learns from field, field builds product

Example: Palantir’s Foundry platform was built from FDE field discoveries. Revenue went from experimental to “billions in revenue” because FDEs identified what actually worked across customer deployments.

Why The Distinction Matters Now (AI Era)

Here’s where your skepticism should actually increase: Most companies calling people “FDEs” are just rebranding PS consultants.

The research shows:

• Salesforce built a 1,000-person FDE team in 2025

• OpenAI, Anthropic, Databricks all hiring “FDEs”

• BUT - many are essentially glorified solutions engineers with a new title

The test of whether it’s real FDE vs. rebranded PS:

The Palantir Reality Check

One former Palantir FDE wrote candidly: “This model requires a high hiring bar and a lavish budget… We’d often have several teams working on similar problems, and wound up with multiple products… And there were many failures – spectacular pyres of time and treasure.”

The honest truth: True FDE model is insanely expensive and wasteful by traditional SaaS metrics. Palantir had more FDEs than core engineers until 2016. That’s not scalable for most companies.

What WorkingTheories Should Actually Do

Given your background, here’s the practical positioning:

Don’t compete with “FDE” hype - instead, position as:

“AI Implementation Specialists for Salesforce Customers”

Your differentiation:

1. Not time-and-materials consultants (like traditional PS)

2. Not embedded for 18 months (like true FDEs - too expensive)

3. Outcome-based engagements (3-6 months to production AI use case)

4. Product-informed methodology (you understand Agentforce/Data 360 architecture deeply)

5. Capacity building (you train their team, don’t create dependency)

The pitch to customers:

• “Big 4 consultants bill you hourly to learn Salesforce on your dime”

• “True FDEs are $400K+ and Salesforce only deploys them for $10M+ deals”

• “We give you senior Salesforce AI architects at project pricing with guaranteed outcomes”

You’re the middle ground:

• More technical and product-deep than traditional PS

• More cost-effective and defined scope than FDEs

• Faster to production than either

The market gap: Companies want FDE-level expertise without FDE-level commitment or cost.

That’s the actual opportunity.