Microsoft Acquires 4% Stake in LSEG in Decade-Long Cloud Deal

UTC by Benjamin Godfrey · 3 min read
Microsoft Acquires 4% Stake in LSEG in Decade-Long Cloud Deal
Photo: Depositphotos

The shares of the London Stock Exchange were up by about 4% on Monday, showing investors a positive disposition to the Microsoft partnership.

American multinational tech giant, Microsoft Corporation (NASDAQ: MSFT) has agreed to purchase as much as a 4% stake in the London Stock Exchange Group (LSEG). As reported by CNBC, the deal now involves a 10-year partnership that will see the LSEG migrate its data and analytics needs to the Microsoft Azure Cloud.

The linkage between the Microsoft Corporation and the London Stock Exchange Group will go beyond just investment and ownership stake and extend to next-generation analytics and the release of innovative cloud computing solutions. As the London-based firm shared in its announcement, the deal will see a new data infrastructure built and the introduction of analytics and modeling solutions with Azure, and Microsoft Teams amongst others.

The 4% stake that Microsoft Corporation will take up will be secured from the Blackstone or Thomson Reuters Consortium. With the partnership, the LSEG is set to spend as much as $2.8 billion on Cloud products over the next 10 years, an amount it said is consistent with its long-term spending plans.

“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,” David Schwimmer, CEO of LSEG, said in the statement.

As a minority owner of the LSEG, the partnership will see the appointment of Scott Guthrie, Microsoft’s executive vice president for the Cloud and AI Group as a non-Executive Director of the London-based stock exchange operator.

The need for Artificial Intelligence and Cloud-based innovations in businesses cannot be overemphasized and as such, justifies the partnership between both companies. According to Microsoft’s Chief Executive Officer and Chairman, Satya Nadella;

“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.”

The Microsoft Cloud Computing Deal: a Better Alternative for LSEG

As a platform that is constantly in need of data, LSEG cannot do without cloud infrastructures and other financial and business data to enable it to operate efficiently.

Prior to its deal with Microsoft, the LSEG reached an agreement in 2019 to buy financial information from Refinitiv at a total package of $27 billion. This bogus amount shows how well the stock exchange was willing to go to gain access to data to serve its own clients.

The Microsoft offering appears to come cheap and both firms will be working to float other new collaborative tools. Besides, LSEG will be incorporating Microsoft Azure Cloud as the major substrate for its Workspace, a data analytics platform it developed. The duo will also be advancing this Workspace tool and integrating it with Microsoft Teams in other to give it more mainstream access to the large Microsoft community.

The shares of the London Stock Exchange were up by about 4% on Monday, showing investors a positive disposition to the Microsoft partnership.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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