Microsoft and London Stock Exchange Group (LSEG) today announced a new 10-year strategic partnership. As part of this partnership, LSEG will use Microsoft Cloud for its data infrastructure and the companies will jointly develop new products and services for data and analytics. LSEG will adopt Microsoft 365 for its internal collaboration and communication. Also, Microsoft will purchase approximately 4% equity stake worth £1.6B in LSEG through the acquisition of shares from the Blackstone/Thomson Reuters Consortium.
This partnership also includes contractual commitment by LSEG for minimum cloud-related spend with Microsoft of $2.8 billion (£2.3 billion) over the term of the partnership.
Find the highlights of this partnership below:
Strategic partnership highlights
- New collaboration to architect LSEG’s data infrastructure and build intuitive next-generation productivity, data and analytics and modelling solutions with Microsoft Azure, AI, and Microsoft Teams
- Step-change in services for customers across the financial markets value chain, including an enhanced version of LSEG Workspace with seamless Teams communication and Microsoft 365 interoperability with built-in compliance for the first time
- LSEG’s data platform and other key technology infrastructure to migrate to Microsoft Azure, enhancing its existing cloud migration strategy
- Microsoft to purchase approximately 4% equity stake in LSEG through the acquisition of shares from the Blackstone/Thomson Reuters Consortium
- It is intended that Scott Guthrie, Microsoft’s Executive Vice President, Cloud and AI Group, will be appointed as a non-executive director of LSEG in due course subject to receipt of appropriate approvals
Financial effects for LSEG
- Expected to increase LSEG’s revenue growth meaningfully over time as new products come on-stream
- Total incremental cash costs over 2023-2025 expected to be in the range of £250-300 million, including around £100 million in capex and a 50-100 basis points impact on EBITDA margin over the same period
- Contractual commitment by LSEG for minimum cloud-related spend with Microsoft of $2.8 billion (£2.3 billion) over the term of the partnership, reflecting minimum cloud consumption expectations and consistent with existing long-term opex and capex plans
- Additional spend with Microsoft will be driven by the success of the strategic partnership, based on demand for LSEG’s data platform and other professional services
“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.” – Satya Nadella, Microsoft CEO and ChaIRMAN