Microsoft 365 E7 adds AI governance; prices draw critiques

Gartner: Agent 365 a costly 'work in progress'

Microsoft disclosed details about specific AI governance features that will be released in preview over the next two months. Defender assesses the risk of AI agent compromise and provides data security posture management and data loss prevention. The Purview tie-in evaluates insider risk, according to a Microsoft blog post, with security posture management and detection, investigation and response for Foundry and Copilot Studio agents. New runtime threat protection, investigation and hunting with Agent 365 through Microsoft Purview will go into public preview in April.

However, a Gartner First Take report published and sent to press March 9 called it a work in progress with unfinished features, limited automation and unanswered questions still outstanding.

"Many features are unfinished or restate metrics available in other admin centers and dashboards," the report stated. "Agent 365 surfaces alerts (for example, risky agents), but administrators must act on them manually. This may work for a small number of agents, but at scale it will require automation or agentic automation capabilities, such as guardian agents."

Another industry analyst questioned whether the concept of "guardian agents" will be the ultimate answer to AI governance concerns.

"An agent to monitor an agent or to remediate another agent, I think, exponentially increases the risk -- it'll have to be shifted left," said Matthew Flug, an analyst at IDC. "It'll just be the way that you build agents in these platforms. You have to use the platform in order to build an agent, and governance is taken care of for you before you deploy."

But Gartner's report also highlights gaps in agent coverage for Agent 365's Entra-based agent identity, at least so far.

Gartner has not seen enough new or dedicated functionality in Agent 365 to justify its current price point, though this will likely change as the product matures.

"There is no way to retroactively assign an Agent ID to agents created before Entra ID agent registration became available," the report said. "Unless re-created, these agents remain unmanaged and out of scope for Agent 365 policies. Some third-party providers are also likely to avoid outsourcing agent security to Microsoft, and if integrating with the Agent 365 SDK is not an option, those agents will remain unmanaged in Agent 365."

Ultimately, "Agent 365 acts less like a single, clearly defined product and more like a work in progress," according to the Gartner report. "It is an evolving bundle of Microsoft capabilities that comes at a premium cost. Gartner has not seen enough new or dedicated functionality in Agent 365 to justify its current price point, though this will likely change as the product matures."

Microsoft did not comment specifically on the Gartner reports, but PR reps pointed to a note in the report that Gartner analysts will continue to reevaluate the product as it develops.

Microsoft 365 E7's steep price increase

The upcoming integration between Agent 365 and the Microsoft 365 E7 productivity suite, also due to ship May 1, drew particularly sharp criticism from Gartner and others. Microsoft 365 E7 will bundle Microsoft 365 Copilot, Agent 365, Microsoft Entra Suite and Microsoft 365 E5 with new Defender, Entra, Intune and Purview security features, at a retail price of $99 per-user per-month. This is a $39 per-user per-month increase over the previous E5 version.

A separate Gartner First Take report this week also noted that volume discounts weren't as generous with E7 as with previous versions. E7 offers a 13.2% discount compared to separate component purchases, whereas E3 and E5 are discounted at 14.5% and 16.4%, respectively. That report encouraged CIOs to use the E7 price tag as leverage in negotiations with Microsoft.

"Organizations already licensing ME5 should seek discounts on ME7 that reflect their lost volume band pricing, their current discount on Microsoft 365 products, the magnitude of their Microsoft Copilot commitment, the percentage of users who will really need Agent 365, and the risk of licensing Agent 365 at an early stage," according to the second Gartner report.

Forrester's McKeon-White said he agrees that the pricing "is a bit much, to be frank. I want to wait to see more details on the actual contract, but I'd need it to be all-inclusive of all potential credit spend before I'd feel comfortable going full-on E7 for everyone [in my organization]."

Beth Pariseau, a senior news writer for Informa TechTarget, is an award-winning veteran of IT journalism. Have a tip? Email her.