Microsoft is pricing its AI-powered future of Office documents, Copilot, pretty steeply.
Microsoft is pricing the future of AI-powered Office documents, and it's a pretty steep price for businesses looking to adopt Microsoft's latest technology. Microsoft 365 Copilot will be available to Microsoft 365 E3, E5, Business Standard and Business Premium customers for $30 per user per month.
That's a really big premium over existing Microsoft 365 plans. Microsoft currently charges businesses $36 per user per month, which includes access to Office applications, Teams, SharePoint, OneDrive and many other productivity features. Access to Microsoft 365 Copilot costs an additional $30 per user per month, nearly doubling the cost for businesses that subscribe to the E3 plan and want to use these AI-driven capabilities. That's almost three times as much for Microsoft 365 Business Standard, which costs $12.50 per user per month.
Microsoft is trying to overhaul its Office applications with its AI-powered Copilot service, which enables businesses to quickly outline documents, generate emails and speed up Excel analysis. Microsoft 365 Copilot does look like a very compelling feature addition that I sincerely believe will change the way Office documents are used forever, but in the short term its high cost may put many existing Microsoft 365 businesses off .
About 600 enterprise customers have tested Microsoft 365 Copilot in the paid early access program over the past few months. Companies like KPMG, Lumen and Emirates NBD have the opportunity to use it. Yusuf Mehdi, head of consumer marketing at Microsoft, said in a blog post today: "We are learning that the more customers use Copilot, the more enthusiastic they will be about Copilot. It works under the circumstances."
However, Microsoft has yet to set a release date for Microsoft 365 Copilot. The software giant will also face competition from Google. Microsoft's Copilot announcement comes shortly after Google announced similar AI capabilities for Google Workspace earlier this year, including the use of AI-assisted text generation in Gmail, Docs and more. Zoom and Salesforce have also been adding AI-powered features, so all eyes will now be on how Google, Zoom, and Salesforce price their AI-enhanced features in the future.
Part of the reason for Microsoft 365 Copilot's higher pricing is because Microsoft has been investing in building out its AI-powered offerings. Microsoft has invested billions of dollars in partnership with OpenAI to advance the technology. Tech companies like Microsoft are also scrambling to buy Nvidia's GPUs to power these features, so there's currently a premium on tasks that use this infrastructure until the chips are in sufficient supply and costs come down. Microsoft is reportedly working on its own AI chips to avoid the high costs of over-reliance on Nvidia.
Microsoft will also bring this Copilot experience to Teams, integrated into the Teams phone call experience and Teams chat threads. You can learn more about the new Microsoft Teams Copilot feature here.
In addition to the pricing announcement, Microsoft also introduced Bing Chat Enterprise. It's essentially the same as Bing Chat for consumers, but with the addition of business data protection features. Microsoft is launching a preview of Bing Chat Enterprise today, and it's available at no extra cost in Microsoft 365 E3, E5, Business Standard, and Business Premium. You can learn more about Bing Chat Enterprise here.