Microsoft has entered into a 10-year strategic partnership with London Stock Exchange Group (LSEG) to develop new products and services for data and analytics that could be worth $5 billion in revenue.
The US tech company will also purchase a 4% equity stake in LSEG through the acquisition of shares from the Blackstone and Thomson Reuters Consortium.
The consortium previously sold financial markets data provider Refinitiv to LSEG last year.
Microsoft’s partnership with LSEG looks to empower the future of financial markets by delivering next-generation data, analytics and workplace solutions.
The tech company said this will help firms to connect, research, analyse, collaborate and transact across the entire financial markets chain.
Foundational to the partnership will be the digital transformation of LSEG’s technology infrastructure and transfer of data and analytics platforms onto Microsoft Cloud.
This will include Refinitiv platforms that power more than 40,000 financial institutions in 190 countries with data, analytics and insights across millions of active time series databases, daily evaluations, exchange trades and derivatives, equity quotes, and significant research on public and private companies.
Using this foundation, Microsoft and LSEG will create a new “open, centralised, financial data platform” designed to unlock new offerings for customers to generate more sophisticated and timely insights.
They will also develop the next generation of LSEG Workspace on Microsoft Teams, which will support in-app rich experiences for understanding trends and analysing risk, as well as new cloud-based analytics and modelling solutions.
Microsoft predicts the partnership, along with “broader market opportunity”, could generate as much as $5 billion in revenue over the next 10 years, including $2.8 billion in minimum spend commitments from LSEG for cloud services and support.
Satya Nadella, chairman and chief executive officer at Microsoft, commented: “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.”
David Schwimmer, chief executive officer of LSEG, said: “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.”
He added: “We believe our partnership with Microsoft will transform the way our customers discover, analyse and trade securities around the world, and create substantial value over time.”