Microsoft recently announced a 10-year strategic partnership with the London Stock Exchange Group (LSEG) to empower financial markets. Together, they will design LSEG’s data infrastructure using Microsoft Cloud. They will also jointly develop new products and services for data and analytics. This partnership will build on the good progress made by LSEG on the integration of Refinitiv. As a result, LSEG will be even better positioned as a world-leading financial markets infrastructure and data provider.
“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,” said David Schwimmer, CEO of the London Stock Exchange Group. “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.”
This partnership is a big step forward for the future of financial markets. It builds on Microsoft’s investments in the financial services industry across different areas like capital markets.
Satya Nadella, Chairman and CEO of Microsoft, said “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.”
Key elements of the LSEG and Microsoft strategic partnership
LSEG to build a data platform using the Microsoft Cloud
LSEG will use Azure Purview and Azure Synapse to create a cloud-based data architecture. This will allow them to consolidate their data into one, flexible infrastructure. This will make it simpler, more responsive, and more efficient. It will also be more secure and compliant with regulations. The program accelerates LSEG’s plans for migrating to the cloud. Customers of LSEG will be able to access data faster, wherever they need it. This will enable them to be more resilient and adaptable as capital markets continue to evolve.
Data scientists and engineers will be able to use LSEG’s data and analytics services on LSEG’s infrastructure, or leverage LSEG’s open financial data ecosystem to integrate their data for building custom solutions.
LSEG Workspace will use Teams and Microsoft 365
LSEG and Microsoft are planning a step-change in the advancement of the LSEG Workspace, by creating an all-in-one data, analytics, workflow, and collaboration solution. It will be specifically designed to help finance and investment professionals improve communications and productivity and maintain regulatory compliance. It will allow users to collaborate with other LSEG customers inside and outside of their organizations using Teams. Users will be able to create financial models, run data analysis, and design graphs using LSEG content delivered in Excel. They can work seamlessly between LSEG Workspace, Teams, and Microsoft 365 tools and deliver financial presentations and reports.
Cloud analytics and modeling services using Azure Machine Learning
Microsoft and LSEG will together develop a new suite of solutions using Azure Machine Learning and LSEG’s advanced analytics and modeling capabilities. This will give financial institutions access to sophisticated cross-asset, sustainable investment-aligned, and non-traditional analytics.
On the modeling side, the development will be focused on helping banking and investment institutions avoid the labor-intensive and expensive process of creating models from scratch. The new analytics and modeling services built on the LSEG data platform with Microsoft 365 connectivity, will be available on Workspace and developer-friendly APIs.
Cloud infrastructure built on Microsoft Azure
As part of the strategic partnership, LSEG and Microsoft have agreed to a 10-year commercial agreement that involves migrating LSEG’s data platform and other key technology infrastructure into the Microsoft Cloud. This will provide the foundation for product development programs, which will enable LSEG to achieve faster speed to market and greater customer reach. It will also make LSEG’s costs more directly related to its revenue, reduce operational complexity, and strengthen resilience and security.
Microsoft expects to generate additional revenue of $5 billion from this partnership over the next 10 years. This includes the minimum spend commitments of $2.8 billion from LSEG for cloud services and support. Additionally, Microsoft will also purchase a 4% equity stake in LSEG through the acquisition of shares from the Blackstone/Thomson Reuters Consortium. This is subject to customary antitrust and regulatory approvals and will be completed in the first quarter of 2023.
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