Palo Alto Networks Expands Google Cloud Partnership with Multibillion-Dollar Commitment
December 31, 2025
Security vendor Palo Alto Networks has announced a significant expansion of its collaboration with Google Cloud, including plans to migrate key internal workloads onto Google's infrastructure. The move aims to enhance the integration of Palo Alto’s security tools with Google Cloud, creating a more unified security experience for customers. However, there are indications that Palo Alto may reduce its overall cloud purchase commitments.
Increased Investment in Google Cloud
Palo Alto is dedicating substantial resources to its cloud strategy, with SEC filings revealing an expected spend of at least $6.3 billion on cloud services through 2031. This substantial investment underscores Google's stronger position against competitors AWS and Microsoft Azure in the enterprise cloud market.
In a recent press release, Palo Alto highlighted the move to run its security platforms on Google Cloud’s trusted AI infrastructure. This includes migrating "key internal workloads" under a multibillion-dollar agreement designed to optimize security operations.
Changing Cloud Spending Plans
Initial forecasts indicated that Palo Alto would spend around $145 million in cloud purchases during fiscal year 2026 and approximately $774 million in 2027. However, three months later, the company revised this estimate downward to $660 million for 2027, a reduction of $114 million. The company also allocated $60 million for the remainder of fiscal 2026, though previous quarter spending details were not disclosed.
Looking ahead, Palo Alto's projected cloud investments remain significant, with estimates for 2028 through 2031 reaching nearly $2.5 billion, primarily driven by a growing commitment to Google Cloud. While the exact percentage of these investments allocated specifically to Google is unclear, the partnership’s importance is evident.
Strategic Focus and Customer Benefits
Though the announcement did not introduce new products, Palo Alto emphasized deeper integrations with Google Cloud aimed at accelerating adoption and enhancing security workflows. Key integrations include:
- Palo Alto's Prisma AIRS: Protects Google Cloud AI workloads, including Vertex AI and Agent Engine; offers AI Red Teaming and Model Security to identify vulnerabilities.
- VM-Series Firewalls: Will feature "deep integrations" for threat prevention and packet inspection within Google Cloud.
- Prisma Access in Prisma SASE: Facilitates hybrid cloud connections, optimizing access to AI applications.
Additionally, Palo Alto plans to leverage Google Cloud's Vertex AI and Gemini LLM platforms to power its AI copilots, further integrating AI-driven security solutions.
Strategic Insights and Market Impact
According to Palo Alto’s President BJ Jenkins, this partnership aims to streamline security and development, embedding AI-powered security directly into Google Cloud’s fabric. Jenkins emphasized that the collaboration would turn Google Cloud into a proactive defense system through tight integration of Palo Alto's security tools.
The deal is expected to bolster Palo Alto’s market reach via a Google-led go-to-market strategy, particularly for products like Prisma AIRS, helping to remove friction between security and development teams.
Cloud Costs and Market Dynamics
While the partnership strengthens Palo Alto’s position, the company also reported an increase of $48 million in cloud hosting costs for the quarter ending October 31, compared to the previous year. Despite rising expenses, Palo Alto’s gross margins saw a slight improvement.
Conclusion
Palo Alto Networks’ strategic alliance with Google Cloud marks a significant investment in AI-driven security and cloud infrastructure. This partnership promises to deliver integrated security solutions that benefit customers with enhanced protection across Google Cloud workloads, positioning both companies strongly against competitors.