Microsoft buys 4% stake in LSEG, pair to develop data analytics solutions
Tech giant Microsoft has bought a 4% stake in London Stock Exchange Group (LSEG) as part of a long-term strategic partnership that will see LSEG leverage Microsoft’s cloud service Azure for its data and tech infrastructure.
LSEG and Microsoft enter 10-year strategic partnership
Under the terms of the 10-year commercial agreement, LSEG will migrate its data collaboration platform Workspace and other key technology infrastructure to Microsoft’s Azure cloud service, “accelerating” LSEG’s cloud migration plans.
Scott Guthrie, Microsoft’s executive vice president, cloud and AI group, is also set to be appointed as a non-executive director of LSEG.
The partnership is expected to “meaningfully” increase LSEG’s revenue growth and the pair have agreed to co-invest in the product development roadmap for Workspace and other analytics initiatives.
LSEG and Microsoft will explore the development of digital market infrastructure based on cloud technology, “with a goal to transform how market participants interact with capital markets across a broad range of asset classes”.
Microsoft and LSEG will use Azure Machine Learning and LSEG’s analytics and modelling capabilities to co-develop a new suite of solutions to give financial institutions a “much broader reach” across cross-asset, sustainable investment-aligned and non-traditional analytics.
Businesses that rely on analytics will be able to scale without the need for complicated processes and systems that often require extra servers, hardware, and employee resources, the firms say.
LSEG has also committed to a minimum cloud-related spend with Microsoft over the life of the agreement, amounting to $2.8 billion (£2.3 billion).
The share purchase will be subject to customary antitrust and regulatory approvals and is expected to complete in Q1 2023.
David Schwimmer, CEO of LSEG, says: “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.”
Satya Nadella, chairman and CEO of Microsoft, says: “Advances in the cloud and AI will fundamentally transform how financial institutions research, interact, and transact across asset classes, and adapt to changing market conditions.”
Nadella adds that the partnership will bring together LSEG and Microsoft Cloud, including Azure, AI and Teams, allowing users to “generate business insights, automate complex and time-consuming processes, and ultimately, do more with less”.
