Microsoft has bought a 4% share in the London Stock Exchange

Microsoft is set to purchase an “approximate” 4% stake in the London Stock Exchange Group (LSEG) as part of a new strategic partnership that will se the LSEG’s data infrastructure migrate to Microsoft’s cloud hosting platform Azure.

The financial data provider also claims that the Workspace platform will become “interoperable” with the video conferencing platform Teams and the office software suite 365.

In a press release, the LSEG revealed that the company has committed to a “minimum cloud-related spend” of $2.8 billion (£2.3 billion), with additional spend conditional on how Microsoft’s involvement drives demand for LSEG’s financial analytics platform Workspace and “other related services”.

Microsoft and the LSEG’s partnership

It’s not all about product migration, though. The LSEG hopes to develop “new products and services for data and analytics” alongside Microsoft, following the former’s acquisition of Refinitiv, another financial data provider, in February 2021.

“This strategic partnership is a significant milestone on the 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, the LSEG’s CEO.

Satya Nadella, Chairman and CEO at Microsoft said that “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 [and] automate complex and time-consuming processes.”

So, both companies are claiming that the partnership will change the way financial sector customers conduct business, but it’s also, shock horror, about money. 

“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,” Schwimmer continued.

The LSEG estimates that the costs of the partnership between 2023-2025 will be between £250-£350 million. Despite this, and the mammoth minimum spend, it also believes that its revenue will see a “meaningful boost” over time as new jointly developed analytics products become available for its customers.

The partnership with the LSEG will continue to frustrate Microsoft’s competitors in the video conferencing and collaboration space as it continues to throw money at securing a monopoly.

In November 2022, Slack threatened an antitrust lawsuit in the European Union over Microsoft Teams’ sheer dominance, and it’s certainly likely that the LSEG partnership will drive even more users in the financial sector over to the service. 

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