The London Stock Exchange is now a £50m technology supplier as the software company it acquired in 2009 more than doubled its contribution to revenues.
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In its latest financial year the London Stock Exchange (LSE) made £18m worth of sales through its MillenniumIT trading software business, which it acquired for £18m, compared to £7m in the previous year. Its total technology revenue, which includes sales of datacentre and networking services, was £49m compared to £39m last year.
The LSE's total revenue was £615.9m compared to £605.6m.
The LSE acquired trading software company MillenniumIT for £18m to replace its ailing Tradelect trading system. But the LSE said it will continue to sell MillenniumIT technology to other trading companies and even exchanges.
Acquiring technology suppliers to take control of future product development is a strategy for corporations to future-proof their core systems.
Millennium brought with it a superfast core trading platform which promised to bring the LSE in line with other large international exchanges. The acquisition also gives the LSE access to an array of trading technologies, including post-trade software and market surveillance applications.
The migration of LSE trading from Tradelect to MillenniumIT, completed in February, gave the LSE a Linux base trading system that enabled it to trade in microseconds and the development flexibility it needs to quickly introduce new technology to react to competitive pressures. It also meant it had all the development resources in-house and no longer relied on outsourcing suppliers.
But part of the LSE's plan was to generate a revenue stream. Rather than reduce Millennium's sales business to focus on developing for the London Stock Exchange it sees the acquisition as a potential sales boost.
Tony Weeresinghe, who heads up MillenniumIT, told Computer Weekly last year that, in the past, MillenniumIT has been shunned by the big exchanges, because it did not have the strong balance sheet that is required to be taken seriously.
"Nothing has changed since our acquisition but we have the new brand and a strong balance sheet," Weeresinghe added.
Weeresinghe points out that there has been a lot of work at the infrastructure level to increase the performance levels such as trading speeds at the London Stock Exchange.
This year the LSE, through MillenniumIT, has sold a surveillance system to the Egyptian stock exchange and a trading system to Johannesburg's exchange.