Microsoft announced on Monday that the company is fostering a decade-long partnership with the British company London Stock Exchange Group (LSEG), as per CNBC.
The partnership is fostered to enhance the exchange's data and analytics offerings. As part of the 10-year deal, the US tech giant would buy a four percent stake in the LSEG.
The partnership of Microsoft, LSEG Signifies Stronger Ties
The partnership between Microsoft and LSEG is the latest sign of stronger ties between financial services providers and big global cloud companies. This has prompted regulators to scrutinize the deal more closely, according to Reuters.
According to David Schwimmer, LSEG CEO, the strategic partnership between the financial service provider and Microsoft is a significant achievement on LSEG's journey to becoming the leading global financial markets infrastructure and data business.
Moreover, he added in his statement that the partnership with the US tech giant would transform the experience of their customers.
According to TechCrunch, Microsoft will buy an approximately four percent stake in the UK firm from the Blackstone/Thomson Reuters Consortium.
As part of the deal, Microsoft products will be used across different parts of LSEG's business.
The partnership entails migrating LSEG's data platform and other key tech infrastructure into Microsoft cloud built on Azure, the tech giant's large public cloud product.
In addition, the deal will grant Microsoft a seat on LSEG's board. According to the firm, it plans to appoint Scott Guthrie, Microsoft's executive vice president for the cloud and AI group, as a non-executive director.
According to the US tech giant, the company expects to complete the purchase of the stake in the first quarter of 2023.
The company added the LSEG will provide an update to its investors on how the programs promised as part of the partnership.
Following the announcement of the partnership, LSEG's shares were up by four percent on Monday morning, according to Forbes.
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The Deal Brings Together Microsoft and LSEG
The deal brings together a primary player in the financial data space and one of the world's tech giants.
According to LSEG, over the 10-year period, the stock exchange firm will spend a minimum of $2.8 billion on cloud-related products with Microsoft. This is "consistent with existing long-term" spending plans, according to LSEG.
As per CNBC, Microsoft and LSEG also plan to work together in developing new professional collaboration tools.
LSEG has already created a product called Workspace. It's a data and analytics platform. Together with Microsoft, LSEG plans to advance this product and integrate it with Teams, the US tech giant's messaging app.
According to Satya Nadella, chairman and CEO of Microsoft, the advances in the cloud as well as in AI will significantly transform how financial institutions research, interact, and transact across classes of assets. Similarly, it will transform how it adapts to changing market conditions.
Meanwhile, according to LSEG, the partnership is expected to increase the stock exchange's revenue growth over time.
The deal between Microsoft and LSEG comes as firms race to create tools that will allow investors and analysts to leverage the huge amounts of data available in order to obtain better insights for opportunities for investment faster.
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