Dive Brief:
- Microsoft and London Stock Exchange Group announced a 10-year strategic partnership to accelerate LSEG’s cloud modernization in a Monday press release.
- The deal creates interoperability between LSEG’s Refinitiv Workspace data and analytics platform and Microsoft 365. In addition, the two companies plan to build a new financial data platform on Azure.
- Microsoft expects to generate $5 billion in revenue as a result of the deal, in part through LSEG's commitment to spend $2.8 billion over the term of the partnership, according to a Sunday blog post by Judson Althoff, EVP and chief commercial officer at Microsoft.
Dive Insight:
The deal is more than just a multibillion cloud services contract for Microsoft.
The pact gives the second-largest player in the U.S. market for public cloud infrastructure access to Refinitiv, a subsidiary of LSEG. Refinitiv’s global reach extends to over 40,000 financial institutions in 190 countries, according to Althoff’s post.
Refinitiv is Bloomberg’s primary desktop competitor in the financial markets insights space.
Microsoft dominates the worldwide market office productivity software suites, with just over an 85% share, according to Gartner.
Integrating Workspace with 365 solidifies Microsoft's position in the financial services sector, where the cloud market is expected to reach over $100 billion by 2030, according to Grand View Research analysis published in September.
Microsoft’s two biggest competitors for CSP dominance have already made inroads in the financial exchanges.
AWS, which commands just over one-third of the U.S. market according to Synergy Research Group, confirmed a multiyear deal with Nasdaq to migrate its data last year.
Alphabet, whose Google Cloud trails Microsoft’s 21% with an 11% U.S. market share, signed a 10-year cloud deal with derivatives marketplace CME Group in November 2021.
As part of the Microsoft partnership, LSEG will use Azure tools to create a consolidated financial data platform, deploy Azure ML to bolster its data modeling capabilities and migrate its proprietary data platform into Microsoft’s cloud ecosystem, Althoff said in his post.
In addition to providing cloud services, Microsoft has purchased a 4% equity stake in LSEG, worth approximately $2 billion, according to the press release.
