Data analytics and cloud computing has brought together two powerful entities from across the pond – The London Stock Exchange (LSEG) and Microsoft. On December 11, Microsoft announced that it will enter into a strategic partnership with the LSEG to improve services for customers across the financial markets value chain. As Microsoft buys stake in London Stock Exchange, it is expected to improve revenues for both.
Microsoft will buy approximately 4% stake in LSEG from a consortium of Blackstone/Thomson Reuters. Over time, subject to approvals, Microsoft’s Executive Vice President, Cloud and AI Group, Scott Guthrie, is expected to take over as a non-executive director at LSEG.
Microsoft buys stake in London Stock Exchange
Long-term partnerships are a must for the progress of tech firms. As Microsoft buys stake in London Stock Exchange, it is clear that the two firms will continue to collaborate for a decade and even more, depending on how well things improve.
The Microsoft and LSEG partnership will give the stock exchange’s existing data infrastructure a much-needed facelift.
The announcement bumped up LSEG’s share price by nearly 4% on Monday, as hope blossomed amongst risk-wary investors. The rise was also the highest on the FTSE 100.
David Schwimmer, CEO of LSEG, said, “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.”
“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.”
LSEG will move its data handling and cloud services on to Microsoft, and the contract stipulates a minimum spend of $2.8 billion (£2.3 billion) over the course of 10 years.
Meanwhile, addressing the partnership Microsoft CEO Satya Nadella said that as Microsoft buys stake in London Stock Exchange, advancements in AI will shape the future of the financial world.
The partnership is expected to help LSEG automate complicated tasks, generate business insights, and transform the financial market. Nadella is convinced that AI will transform the financial landscape, and will revamp how people research, analyze, trade, and make predictions across asset classes.
LSEG will be using Microsoft’s services, including Cloud, Azure, AI, and Teams. The two firms have also decided upon a governance structure and will update investors about its progress in early 2023.
Schwimmer is hopeful that the Microsoft and LSEG partnership will redefine customer experiences as the two giants work together for progress.
“It’s a long term partnership. In terms of the products we will be building together, I would expect our customers to start to see the benefits of that 18 to 24 months out and we will continue building from there,” Schwimmer told Reuters.
Cloud Services
According to Statista, Amazon, Microsoft and Google accounted for two thirds of cloud infrastructure revenues for the quarter that ended on September 30.
While Amazon Web Services continues to dominate the market share with 34%, Microsoft is not far behind and has been making bigger strides to put up some tough competition. Currently, Microsoft’s Azure holds 21% and the top three is rounded off by Google’s 11%.
In August of this year, Amazon and Microsoft admitted that cloud computing is the future and companies are signing bigger, more long-term deals.
During the fiscal Q4 earnings call for Microsoft, Nadella admitted that keeping this in mind the company is working on expanding its data centers, with additional 10 regions coming in next year.
The company also managed to bag a record number of $100 million-plus and $1 billion-plus deals in Q4.
It is evident that Microsoft Cloud will focus on aggressive expansion tactics as it aims to become the market leader in cloud technology.
