Microsoft and London Stock Exchange agree £2.3bn 10-year cloud deal

The London Stock Exchange Group (LSEG) will spend at least £2.3bn on Microsoft cloud services as part of a 10-year deal to transform its data and analytics business.

Microsoft has also bought 4% equity in the London Stock Exchange group as part of the agreement, which will see the exchange’s data and analytics business infrastructure transformed using the Microsoft cloud and artificial intelligence (AI).

As part of this, the data platform and other key technology infrastructure of the stock exchange will migrate to Microsoft’s Azure cloud environment.

The exchange said this would build on progress made on the integration of financial data giant Refinitiv, which it acquired for £22bn in 2019.

Refinitiv, previously known as Thomson Reuters’ financial and risk business before it was acquired by Blackstone Group in October 2018, has three parts to its business: it provides data platforms that go on trading floors to give investment firms the latest information to help them make investment decisions; it processes large volumes of foreign exchange transactions; and it supports compliance activities for big banks, such as anti-money laundering (AML).

The acquisition took the London Stock Exchange into the business of financial data rather than mainly transactions. It combined expertise in high-speed trading with data science to attract financial industry customers.

As part of the latest agreement with Microsoft, Scott Guthrie, executive vice-president of the software giant’s cloud and artificial intelligence group, will become a non-executive director at the exchange, once approved.

London Stock Exchange CEO David Schwimmer said the move was “a significant milestone on LSEG’s journey towards becoming the leading global financial markets infrastructure and data business”.

He added: “Bringing together our leading datasets, analytics and global customer base with Microsoft’s comprehensive and trusted cloud services and global reach creates attractive revenue growth opportunities for both companies.”

Satya Nadella, CEO of Microsoft, said: “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.”