Microsoft will take a 4% stake in London Stock Exchange Group as part of a ten-year commercial deal to migrate the stock exchange operator’s data platform to the cloud, the British company announced on Monday, according to Reuters.
It is the latest sign of deepening ties between financial services providers and several major global cloud computing companies, such as Microsoft, Google, Amazon and IBM, prompting regulators to take a closer look at those ties.
“It’s a long-term partnership. In terms of the products we’re going to build together, I would expect our customers to start seeing the benefits in 18-24 months, continuing to build from that point forward,” Schwimmer told Reuters.
The European Union has approved a law to protect cloud providers
Regulators have expressed concern about financial firms’ over-reliance on too few cloud providers, given the disruption this could cause across the sector if one provider were to fail. bankruptcy.
The European Union has just approved a law introducing safeguards for cloud providers in financial services, and Britain is set to follow suit.
“You would naturally assume that we don’t like to surprise our regulators,” Schwimmer said, when asked if LSEG had made sure regulators were okay with the deal.
LSEG said the tie-up with Microsoft is a partnership to take advantage of “consumption-based pricing” and not a traditional cloud deal.
“We will continue to maintain our multi-cloud strategy and work with other cloud providers,” Schwimmer said.
A $2.8 billion partnership
As part of the deal, LSEG made a contractual commitment to minimum cloud spend with Microsoft of $2.8 billion over the life of the partnership.
Microsoft stated that the basis of the partnership will be the digital transformation of LSEG’s technological infrastructure and the Refinitiv platforms on Microsoft Cloud.
“The initial focus will be on ensuring interoperability between LSEG Workspace and Microsoft Teams, Excel and PowerPoint with other Microsoft applications and a new version of LSEG’s Workspace,” the American company stated.
LSEG shares rose 4% in early trading
LSEG bought Refinitiv for $27 billion from a consortium of Blackstone and Thomson Reuters, turning the stock exchange into the second-largest financial data company behind Bloomberg LP.
LSEG has made “significant progress” in its schedule to deliver its cloud-based data platform since completing the Refinitiv acquisition in January 2021, the London Stock Exchange said in a statement.
Microsoft will buy LSEG shares from the Blackstone / Thomson Reuters consortium, the stock exchange operator said.
Thomson Reuters, which owns Reuters News, has a minority stake in LSEG following the Refinitiv deal.
The acquisition of Microsoft should be completed in the first quarter of 2023, informs Ziarul Financiar.