Microsoft and London Stock Exchange Group (LSEG) have entered into a 10-year strategic partnership, under which LSEG’s data infrastructure will be architected using the Microsoft Cloud and the two companies will jointly develop new products and services for data and analytics.
Microsoft has also agreed to purchase shares in LSEG that would result in Microsoft holding approximately a 4% equity stake in the Group.
This is the latest in a series of tie-ups between exchange groups and hyperscale cloud providers, following Nasdaq’s multi-year partnership with AWS and Google’s 10-year strategic partnership and $1bn investment in CME, both announced late last year.
Under the partnership, LSEG will use Azure Purview and Azure Synapse to create its cloud-based data architecture that consolidates LSEG datasets onto a single infrastructure, accelerating LSEG’s existing cloud migration plans. Additionally, data scientists and engineers will be able to utilise LSEG’s data and analytics services on LSEG’s infrastructure, or leverage LSEG’s open financial data ecosystem by integrating their own data to build custom solutions.
As part of LSEG’s product development with Microsoft, LSEG’s data and analytics workflow solution, Workspace, will become interoperable with certain Microsoft applications, creating an all-in-one data, analytics, workflow, and collaboration solution, specifically designed to help finance and investment professionals improve communications and productivity while maintaining regulatory compliance.
The two companies have also agreed to 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. Whether or not this means that LSEG’s matching engines will be migrated to the cloud is not clear at this point.
“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,” commented 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 continued: “We are delighted to welcome Microsoft as a shareholder. We believe our partnership with Microsoft will transform the way our customers discover, analyse, and trade securities around the world, and create substantial value over time. We look forward to delivering on that potential.”
Satya Nadella, Chairman and CEO of Microsoft, commented: “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. 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.”
It is intended that Scott Guthrie, Microsoft’s Executive Vice President, Cloud and AI Group, will be appointed as a non-executive director of LSEG.
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