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How does Microsoft 365 Copilot pricing and licensing work?

Getting access to Copilot for Microsoft 365 may be a simple process or almost completely unfeasible at this time, depending on the organization that wants to deploy it.

Like many other Microsoft products, Copilot for Microsoft 365 has some prerequisites and payment structures that organizations must navigate.

Complicating things further is the variety of copilot technologies and integrations that Microsoft has released. Organizations need to know what copilots are available to purchase and which is right for them.

What types of Microsoft copilots are there?

Microsoft's copilot technologies are large language model-backed virtual assistants that can access user data and public content online to answer questions with natural language responses, but different copilot integrations serve different roles.

There are too many copilots to reasonably list here, but one version of Copilot is already live on Microsoft Edge, and it can help users navigate the web more efficiently while providing important context about content and websites. Microsoft's GitHub Copilot has been available long before the release of Copilot for Microsoft 365, and it helps programmers work more efficiently by providing autocomplete suggestions and natural language comments in a separate window based on the user's past work.

Other copilots include Microsoft Sales Copilot, which aims to improve efficiency in sales firms and departments, Microsoft Copilot Studio, which lets administrators create virtual assistant-driven automations and bots, and Microsoft Security Copilot, which brings AI automation to security operations.

Many other copilots integrate with Microsoft business technology, but none have the potential reach in terms of user base that Microsoft 365 Copilot does. Copilot for Microsoft 365 is a much broader version of the copilot technology, as it aims to improve efficiency across the entire Microsoft productivity suite of applications and services. This copilot will affect the most users while they work, offering the greatest potential for increased productivity. But before organizations fully commit to the improvements and use cases, they need to determine if deploying copilot is a realistic option from a licensing and price perspective.

These requirements and costs may change over time, but they are accurate as of December 2023.

What are the prerequisites for Copilot for Microsoft 365?

Because Copilot for Microsoft 365 only works as an add-on to an existing service, customers will need several prerequisites before purchasing this technology. To begin, customers need a valid Microsoft 365 E3 or E5 license. Subscribers to other variants of Microsoft 365 don't currently have public access to the productivity suite's copilot.

Another key factor that will stand in the way of many SMBs' adoption of Copilot for Microsoft 365 is the 300-seat minimum for licensing. There may not be a way to stop organizations with 200 users from purchasing the 300-minimum license, but the high costs might not provide enough value to justify this purchase.

The license fees for Microsoft Copilot for Microsoft 365 are $30 per user, per month. However, the total cost involves more than a single license fee.

Apart from these two major prerequisites, there are some smaller requirements that IT teams must keep in mind to ensure that a user base is ready for Copilot deployment. To access Copilot for Microsoft 365, end users need the following:

  • An active Microsoft Entra ID.
  • The "new Outlook," currently in preview.
  • Microsoft 365 Apps for enterprise.
  • WebSocket connections allowed on any endpoint.

How much does Copilot for Microsoft 365 cost?

The license fees for Copilot for Microsoft 365 are $30 per user, per month. However, the total cost involves more than a single license fee.

Users also need active Microsoft 365 licenses -- either E3 or E5 -- which cost $36 and $57 per user, per month, respectively. Additionally, a Copilot for Microsoft 365 license requires an annual commitment. Factoring in the 300-set minimum means organizations should be ready to pay at least $108,000 per year for access to Copilot on top of the existing Microsoft 365 licensing fees. The cost will be even greater for organizations with over 300 copilot users.

Does Copilot for Microsoft 365 offer a free trial?

While other copilots from Microsoft offer free trials for administrators, Copilot for Microsoft 365 currently has no free trial program. Organizations will have to commit to an annual subscription to access this technology.

John Powers is senior site editor for TechTarget's Enterprise Desktop, Virtual Desktop and Mobile Computing. He graduated from the Philip Merrill College of Journalism at the University of Maryland.

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