Microsoft is buying a 4% share in the London Stock Exchange Group (LSEG), which also owns the London Stock Exchange and many other companies, including Refinitiv, a provider of financial market data, which LSEG paid a Blackstone/Thomson Reuters consortium $27 billion for last year.
A larger 10-year collaboration that includes a contractual obligation for LSEG to spend a minimum of $2.8 billion on cloud computing services comprises Microsoft’s investment, which it acquired from the same Blackstone/Thomson Reuters consortium. This will entail LSEG moving its data platform and “other important technical infrastructure” to Azure, and integrating the Workspace data and analytics product with major Microsoft programs like Teams and the larger Microsoft 365 software suite. LSEG acquired Refinitiv last year.
This initial collaboration will result in a single offering that combines data, analytics, and collaboration, and it may enable LSEG to take on Bloomberg as the preferred platform for financial and investment professionals.
All LSEG users will be able to work with one another via Teams and create models and graphs, for instance, by linking LSEG material to Excel. However, the partnership’s scope appears to be quite broad, with intentions to combine LSEG’s analytics and modeling with Microsoft’s cloud-based machine learning expertise to “co-develop a new portfolio of products” for financial institutions, according to the businesses.
Therefore, this is a win-win situation for both businesses: a sizable cloud contract for Microsoft that allows it to serve the 40,000 clients of Refinitiv, as well as an equity investment in a significant Bloomberg rival. And LSEG now has the technological and financial support of one of the major public cloud providers in the world.
According to LSEG CEO David Schwimmer, “combining our industry-leading data sets, analytics, and worldwide client base with Microsoft’s comprehensive and trusted cloud services and global reach presents compelling revenue development potential for both organizations.”
