On December 12, 2022, Microsoft announced the signing of a 10-year strategic partnership with the operator of the London Stock Exchange, the London Stock Exchange Group (LSEG). To obtain this participation in the London Stock Exchange, the company turned to the investment fund Blackston and the press agency Thomson Reuters.
Microsoft takes a step closer to the financial data market
As part of the collaboration between the London Stock Exchange Group and Microsoft, the latter will take a 4% stake in the stock market operator. This corresponds to an investment of 1.75 billion euros. In parallel with this purchase of shares on the London Stock Exchange, the vice president responsible for Microsoft’s cloud and artificial intelligence, Scott Guthrie, should join the board of LSEG.
If Satya Nadella’s company has decided to approach the British stock market operator, it is because it knows that its investment must be lucrative in the medium/long term. ” Advances in the cloud and artificial intelligence will fundamentally transform the way financial institutions research, interact and trade across all asset classes and adapt to changing market conditions ” said the CEO.
The exchanges must inevitably manage a large amount of constantly updated data. Information intersects, and knowing it as quickly as possible is a crucial issue for all players in the financial world. The tech giants know this and do not hesitate to offer their services to the exchange platforms that need them. A boon for Microsoft, which is also seeing its cloud operations overtake its historical operations in terms of revenue.
Exchange platforms are increasingly migrating to the cloud
David Schwimmer, CEO of the London Stock Exchange said that “ this strategic partnership was an important step in LSEG’s journey to become the global leader in market infrastructure and financial data and will transform our customers’ experience “. LSEG will be able to take advantage of the latest technologies from Microsoft to consolidate its position in the financial data market.
The operator should spend at least 2.9 billion euros over the next ten years to access cloud services offered by Microsoft Azure. It will thus have the opportunity to implement its platform, which it was able to develop by buying Refinitiv for $27 billion. This provider of financial data services has more than 40,000 customers worldwide and was previously considered one of the new players in the sector.
Microsoft is not the first company to take an interest in exchange platforms. By November 2021, Google had invested 1 billion euros in the Chicago Mercantile Exchange (CME) for a similar ten-year contract. Amazon has moved closer to the Nasdaq, the New York-based technology stock market. According to The echoesEuroNext, the European stock market operator has not yet chosen to migrate its data to the cloud.