Microsoft is set to acquire a "rough" 4% stake in the London Stock Exchange Group (LSEG) in a new strategic partnership that will see LSEG's data infrastructure migrate to Microsoft's Azure cloud hosting platform.

The financial data provider also claims that the Workspace platform will become "interoperable" with the Teams video conferencing platform and the 365 office software suite.

In a press release (opens in a new tab), LSEG revealed that the company has committed to a "minimum cloud spend" of $2800 billion (£2300 billion), with additional spending contingent on how Microsoft's involvement drives demand for LSEG's financial resources. Workspace analysis platform and “other related services”.

Microsoft and the LSEG association

However, it is not just about product migration. LSEG expects to develop "new products and services for data and analytics" together with Microsoft, following the former's acquisition of Refinitiv (opens in a new tab), another financial data provider, in February 2021.

"This strategic partnership is an important step in LSEG's journey to become the global leader in financial markets data and infrastructure, and will transform the experience for our clients," said David Schwimmer, CEO of LSEG.

Satya Nadella, President and CEO of Microsoft, said: "Our partnership will bring together the industry leadership of the London Stock Exchange Group with the confidence and breadth of Microsoft Cloud, spanning Azure, AI and Teams to create next-generation services that enable our clients to generate business insights [and] automate complex and time-consuming processes.

So the two companies say the partnership will change the way financial industry clients do business, but it's also about money.

"Bringing together our core data sets, analytics, and global customer base with Microsoft's comprehensive and trusted cloud services and global reach creates compelling revenue growth opportunities for both companies," Schwimmer continued.

The LSEG estimates that the costs of the partnership between 2023 and 2025 will be between £250m and £350m. Despite this, and despite the gigantic minimum spend, it also believes its revenue will see a "significant increase" over time as new co-developed analytics products become available to its customers.

The LSEG partnership will continue to frustrate Microsoft's competitors in the video conferencing and collaboration space as it continues to throw money at a monopoly.

In November 2022, Slack threatened antitrust lawsuits in the European Union over the stranglehold of Microsoft Teams, and the LSEG partnership is certainly likely to entice more users from the financial industry to turn to the service.

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