Microsoft has entered a transformative ten-year deal with the London Stock Exchange Group (LSEG) to implement cloud, data analytics, and workspace products across the exchange operator’s technology framework.
As part of this agreement, LSEG’s data platform and other critical technology infrastructures will shift to Microsoft’s Azure cloud environment. The exchange operator has committed to a minimum expenditure of $2.8 billion for cloud services and support, a deal projected to bring about $5 billion in revenue for Microsoft.
To solidify the partnership, Microsoft is also acquiring a 4% stake in the London Stock Exchange by purchasing shares from the Blackstone/Thomson Reuters Consortium. David Schwimmer, CEO of LSEG, expressed enthusiasm about the partnership, stating, “We are delighted to welcome Microsoft as a shareholder. We believe our partnership will transform the way our customers discover, analyze, and trade securities globally, creating substantial value over time. We look forward to delivering on that potential."
The collaboration will see LSEG utilizing Azure Purview and Azure Synapse to consolidate its datasets, including the Refinitiv platform, on Microsoft Cloud. Additionally, the companies have agreed to develop a new version of LSEG’s data and analytics product, Workspace, featuring seamless interoperability with Teams (for chat, calls, and meetings) and Microsoft 365 (including native analytics and charting in Excel). This innovation may significantly enhance the product’s appeal, presenting a compelling alternative to Instant Bloomberg for the first time.
LSEG and Microsoft are also committing to co-invest in the product development roadmap for data platform and analytics initiatives. The expected incremental cash costs for LSEG related to these programs from 2023 to 2025 are estimated to be between £250 million and £300 million.
Schwimmer added, “Bringing together our leading datasets, analytics, and global customer base with Microsoft’s comprehensive and trusted cloud services and global reach creates attractive revenue growth opportunities for both companies.”
For more information, you can visit the Financial Cloud Summit, which is scheduled to take place on 2 March 2023.