TL;DR
Palo Alto Networks announced a multibillion-dollar expansion of its Google Cloud relationship, moving key internal workloads to Google and deepening integrations between its security products and Google Cloud AI services. SEC filings show the company lowered its expected cloud purchase commitments for fiscal 2027 by $114 million versus an earlier estimate.
What happened
Palo Alto Networks said it will migrate important internal workloads onto Google Cloud and tighten integrations between its security stack and Google Cloud’s AI infrastructure under a newly announced multibillion-dollar agreement. The company highlighted closer connections for several products: its Prisma AIRS security platform will cover Google Cloud AI workloads including Vertex AI and Agent Engine, VM-Series firewalls will gain deeper packet-inspection and threat-prevention ties with Google Cloud, and Prisma Access (part of Prisma SASE) will better link WAN infrastructure across clouds to support AI application access. Palo Alto also plans to run its copilots on Google Cloud’s Vertex AI and Gemini LLM. Separately, SEC filings and company disclosures show Palo Alto lowered its projected cloud purchase commitments for fiscal 2027 from an earlier estimate by $114 million and reiterated multiyear cloud spending plans through 2031.
Why it matters
- Shifting key workloads and tighter product integration could steer a sizable portion of Palo Alto’s cloud spend toward Google Cloud, strengthening Google’s position against AWS and Azure.
- Deeper integration between security tools and Google’s AI infrastructure may influence how enterprise customers secure AI workloads and adopt cloud-native AI services.
- A reduction in projected 2027 cloud commitments suggests Palo Alto is pursuing procurement or cost-efficiency measures as its cloud hosting expenses grow.
- Using Google’s Vertex AI and Gemini for Palo Alto copilots signals broader industry reliance on major cloud providers’ LLM and AI platforms.
Key facts
- Palo Alto described the agreement as a multibillion-dollar expansion of its Google Cloud relationship.
- The company said it will migrate “key internal workloads” to Google Cloud and deepen integrations across security products.
- SEC filings indicate Palo Alto has committed to at least $6.3 billion in cloud spending through 2031.
- Palo Alto revised its expected cloud purchase commitments for fiscal 2027 down by $114 million (from $774 million to $660 million).
- Earlier plans included $145 million in cloud purchase commitments for fiscal 2026; the company later said it would spend $60 million in the remainder of fiscal 2026.
- Projected cloud purchase commitments by year: $998 million in 2028, $1.01 billion in 2029, $1.14 billion in 2030, and about $2.5 billion for 2031 and beyond.
- Three integrations called out by the company: Prisma AIRS protecting Google Cloud AI workloads (including AI model security and red teaming), VM-Series firewall deep integrations, and Prisma Access improving multi-cloud WAN and AI app access.
- Palo Alto plans to power its copilots with Google Cloud’s Vertex AI platform and Gemini LLM.
- Cloud hosting service costs rose $48 million year-over-year for the quarter ended Oct. 31; the company’s gross margin edged up by 0.1 percentage point.
What to watch next
- Whether a material share of Palo Alto’s multiyear cloud commitments will be fulfilled by Google Cloud or remain spread across other providers (not confirmed in the source).
- If the deeper integrations lead to measurable reductions in Palo Alto’s cloud hosting costs or fixed commitments (not confirmed in the source).
- Customer adoption of the integrated offerings and any new product announcements that build on this partnership (not confirmed in the source).
- Public comment or clarification from Palo Alto or Google about how the agreement was negotiated and the precise financial allocations (the source noted requests for comment received no response).
Quick glossary
- Google Cloud: A suite of cloud computing services provided by Google, including infrastructure, platform, and AI tools.
- Vertex AI: Google Cloud’s managed platform for training, deploying, and managing machine learning models.
- LLM (Large Language Model): A type of machine learning model trained on large text corpora to generate or analyze human-like language.
- Firewall: A network security device or software that monitors and controls incoming and outgoing network traffic based on security rules.
- SASE (Secure Access Service Edge): A cloud-delivered model that combines network and security services—such as secure web gateways and SD-WAN—to connect users to applications securely.
Reader FAQ
Did Palo Alto say it will move internal workloads to Google Cloud?
Yes. Palo Alto said it will migrate “key internal workloads” to Google Cloud as part of the expanded agreement.
Were any new Palo Alto products announced in this deal?
No. The company’s announcement did not include new product launches but described deeper integrations.
Did Palo Alto reduce its cloud purchase commitments for 2027?
Yes. The company’s outlook for fiscal 2027 cloud purchase commitments was lowered by $114 million compared with an earlier estimate.
How much of Palo Alto’s future cloud spending will go to Google Cloud?
Not confirmed in the source.
SECURITY 2 Palo Alto's new Google Cloud deal boosts AI integration, could save on cloud costs SEC filings show the outfit cut projected 2027 cloud purchase commitments by $114M O'Ryan…
Sources
- Palo Alto's new Google Cloud deal boosts AI integration, could save on cloud costs
- Palo Alto's new Google Cloud deal boosts AI integration
- Palo Alto Networks and Google Cloud Forge Landmark …
- Palo Alto Networks announces multibillion-dollar Google …
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