Is Licensing Copilot for Microsoft 365 Worth the Cost?

Microsoft has done an abrupt about face by making Copilot, its generative AI tool, available to just about everyone who uses Microsoft 365. However, Copilot is not free. Anyone wishing to access it in Microsoft 365 – whether for professional or personal use – must pay for a license. Here is the question: is licensing Copilot worth the cost?

As with all Microsoft products, Copilot is subject to compliance verification. A typical Microsoft license audit will account for every use of Microsoft products – including Microsoft 365 and Copilot. The catch is that Copilot is not even accessible from Microsoft 365 without an appropriate license.

Microsoft 365 Business Standard or Premium

The starting point for utilizing Copilot in Microsoft 365 is its existing Microsoft 365 plan. In other words, organizations need either a Standard or Premium license for Microsoft 365. Free users accessing Microsoft’s office suite through the web do not have access to Copilot. Above and beyond Microsoft 365 Standard or Premium, additional licensing is necessary as follows:

  • Enterprise Deployment – Microsoft 365 E3, E5, Microsoft 365 E3, or E5 license.
  • Educational Deployment – Microsoft 365 A3 or A5 (for faculty).

IT administrators can assign Copilot licenses to different users within the Microsoft 365 admin center. Doing so can be tricky, so it is advised that administrators read and understand the licensing documentation prior to doing so.

Why Organizations Might License Copilot

Based on additional costs that could be as high as $30 per user per month, and the availability of free generative AI tools, you might wonder why an organization might license Copilot for use in Microsoft 365. The answer is as simple as understanding that Copilot offers something free AI tools do not: additional training via the Microsoft 365 tenant.

Free generative AI tools are trained solely on information publicly available from the internet. All their answers are derived from internet-scraped information. Copilot has access to that same body of data. But it also has access to data generated from within the tenant’s closed environment.

Tenant data is combined with Copilot’s existing language model for better and more customized training. A tenant’s deployment of Copilot is essentially customized by training it on the tenant’s own data. In theory, this provides more accurate answers for every prompt.

Licensing and Legal Requirements

In these early stages of AI-enhanced business operations, smart executives will pay attention to licensing and legal requirements. Microsoft’s Copilot comes with a license just like any other MS product. License terms and conditions are likely to change as jurisdictions around the world implement laws dictating how AI can be utilized.

Even now, the European Union is close to finalizing the world’s first comprehensive set of AI regulations. If they are anything like the EU General Data Protection Regulation (GDPR), they will literally set the stage for future generative AI deployments. Here in the U.S., several states are currently working on their own AI regulations.

Generative AI Is Here to Stay

The reality of the situation is that generative AI is here to stay. Microsoft has introduced its Copilot project with the aim of eventually integrating it into every aspect of every product they produce. Right now, the main target is Microsoft 365. If you use Microsoft 365 and want access to Copilot, you need to have an appropriate license.

We encourage you to include Copilot licensing in your Microsoft audit preparations. An audit will look into your use of Copilot on a per user basis. Maintaining compliance with Copilot licensing is just as critical as compliance across the rest of the Microsoft ecosystem. We can help you maintain compliance with a set of Microsoft-tailored services. Contact us today to discuss your Microsoft license review.

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