Microsoft acquires stake in London Stock Exchange Group as part of ten-year cloud deal

Microsoft has announced a new strategic partnership with the London Stock Exchange Group (LSEG) that will see the tech giant secure a 4% equity stake.

Microsoft said the 10-year partnership will include an overhaul of LSEG’s technology infrastructure and migration of the group’s data and analytics platforms to Microsoft’s Azure cloud, in a statement on Monday.

Under the arrangements, LSEG will use Azure Purview and Azure Synapse to further develop its cloud-based data architecture.

This will enable it to consolidate data sets onto a single centralised platform that will enhance democratisation of data, boost collaboration, and unlock new monetisation opportunities, the group said.

Additionally, data scientists and engineers will be able to leverage LSEG’s data and analytics services and financial data ecosystem by integrating their own data to build custom solutions.

“This strategic partnership is a significant milestone on LSEG’s journey towards becoming the leading global financial markets infrastructure and data business and will transform the experience for our customers,” said David Schwimmer, CEO of LSEG.

“Bringing together our leading data sets, analytics, and global customer base with Microsoft’s comprehensive and trusted cloud services and global reach creates attractive revenue growth opportunities for both companies,” he added.

"Next Generation" Workplace Experiences

As part of the deal, Microsoft and LSEG will also work closely to overhaul its suite of workflow and collaboration tools.

Further development of the 'LSEG Workspace on Microsoft Teams' platform will enable the group to deliver “rich experiences” for understanding trends and analysing risk, while meeting security, privacy, and compliance requirements.

The group also said that all-in-one data, analytics, and workflow platform will allow customers to create financial models, run data analytics and visualisations using LSEG content delivered in Excel, and work seamlessly between LSEG Workspace and Microsoft 365.

Microsoft CEO Satya Nadella said the partnership will “fundamentally transform” how financial institutions research and interact, and enable LSEG to adapt to changing market conditions.

“Our partnership will bring together the industry leadership of the London Stock Exchange Group with the trust and breadth of the Microsoft Cloud — spanning Azure, AI, and Teams — to build next-generation services that will empower our customers to generate business insights, automate complex and time-consuming processes, and ultimately, do more with less,” he said.

“Significant milestone”

The partnership marks a significant milestone for both Microsoft and LSEG, and builds on Microsoft investments across the financial services industry.

Over the course of the deal, Microsoft estimates the partnership could generate an additional $5 billion in revenue. The tie-up will also include a $2.8 billion minimum spend commitment from LSEG for cloud services and support, which reflects initial “minimum cloud consumption expectations”. LSEG said spending could rise if demand for new services increases.

For LSEG, the deal provides closer integration with one of the world’s largest technology companies and builds on extensive work enhancing its data infrastructure in recent years.

In 2019, the group agreed a $27 billion deal to buy Refinitiv, a global provider of financial market data and infrastructure technologies.

The acquisition has enabled LSEG to increase its presence in the US, the world’s biggest financial market, and accelerate expansion in Asia and emerging markets.