LSEG partners with Microsoft to architect data infrastructure and analytics on the cloud

Rick Steves

London Stock Exchange Group (LSEG) and Microsoft have partnered to architect LSEG’s data infrastructure using the Microsoft Cloud, and to jointly develop new products and services for data and analytics.

The 10-year commercial agreement to migrate LSEG’s data platform and other key technology infrastructure into the Microsoft Cloud will build on the good progress made by LSEG on the integration of Refinitiv and enhance its position as a world-leading financial markets infrastructure and data provider.

The partnership is expected to increase LSEG’s revenue growth meaningfully over time as new products come on-stream, with 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.

The contractual commitment by LSEG for minimum cloud-related spending with Microsoft amounts to $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.

How institutions research, interact, and transact across asset classes

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.

“We are delighted to welcome Microsoft as a shareholder. 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. We look forward to delivering on that potential.”

Satya Nadella, Chairman and CEO, Microsoft, commented: “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.”

Under the arrangements with Microsoft, LSEG will use Azure Purview and Azure Synapse to create its cloud-based data architecture that consolidates LSEG datasets onto one, flexible infrastructure that is simple, responsive, and efficient, and built with security, privacy, and compliance.

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