Microsoft is to acquire a 4% stake in the London Stock Exchange Group (LSEG), the company that owns the London Stock Exchange as well as a several other businesses, including financial market data company Refinitiv, which LSEG acquired from a Blackstone/Thomson Reuters consortium last year for $27 billion.
Microsoft’s stake, which it bought from the same Blackstone/Thomson Reuters consortium, constitutes part of a bigger 10-year partnership, which includes a contractual commitment for LSEG to spend a minimum of $2.8 billion on cloud computing services. This will involve LSEG migrating its data platform and “other key technology infrastructure” over to Azure, while the Workspace data and analytics product it procured as part of its Refinitiv acquisition last year will be integrated with core Microsoft applications including Teams and the broader Microsoft 365 software suite.
This initial partnership will create a single product spanning data, analytics and collaboration, and could go some way toward helping LSEG challenge the likes of Bloomberg as the go-to platform for finance and investment workers.
The integration will allow all LSEG customers to collaborate with each other through Teams, and generate models and graphs through connecting LSEG content and Excel, for example. But the scope of the partnership seems fairly far-reaching, with plans to mesh Microsoft’s cloud-based machine learning smarts with LSEG’s analytics and modelling to “co-develop a new suite of solutions” for financial institutions, the companies said.
So this is a win-win for both firms: a huge cloud contract for Microsoft that opens it to Refinitiv’s 40,000 customers, as well as an equity investment in a major Bloomberg challenger. And for LSEG, it now has the technological and financial backing of one of the world’s biggest public cloud companies.
“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,” LSEG CEO David Schwimmer said in a press release.