Microsoft Copilot Chat: Free with a Paid Gotcha
Microsoft Copilot Chat: Free with a Paid Gotcha
Microsoft recently announced Microsoft 365 Copilot Chat, a new offering that adds pay-as-you-go agents to the existing free chat experience for Microsoft 365 commercial customers. This blog analyzes this announcement and offers our perspective.
Why Did Microsoft Announce Copilot Chat?
Microsoft’s goal is to make Copilot the ubiquitous user interface for AI. With Copilot Chat, every employee can have access to a Copilot and start using it with agents immediately. This approach enables Microsoft to drive broader adoption of Copilot and increase the usage of AI agents, which are billed on a consumption basis.
Analysis
Microsoft is making a shrewd move by introducing Copilot Chat. By offering a free version, the company can drive wider adoption of Copilot and encourage users to build the AI habit.
While the addition of pay-as-you-go agents is a clever way to monetize the service, we would caution enterprises that it could cause small or large billing overage charges that are not budgeted.
The challenge for Microsoft will be to ensure that the pricing model for agents is transparent and easy to understand, so that users are not surprised by unexpected charges.
What Should Enterprises Do?
Enterprises should evaluate Copilot Chat and consider how it could be used to improve productivity and efficiency. The free version provides a good opportunity to test the capabilities of Copilot and see how it could be integrated into existing workflows. If the use of agents proves valuable, enterprises can then consider upgrading to the paid version.
Impact on the Market
Microsoft’s move will put pressure on AI Startups that need to produce revenue. By making Copilot more accessible, the company is likely to accelerate the adoption of AI in the workplace. With Google also bundling its Gemini AI Assisant into its Google Workspace Business plans, there is even more pressure on AI Startups to find use cases that the hyperscalers are not focuses on.
Bottom Line
Microsoft Copilot Chat is a significant development in the world of AI. By offering a free version with pay-as-you-go agents, Microsoft is making AI more accessible to businesses of all sizes. Enterprises should evaluate Copilot Chat and consider how it could be used to improve their operations – with the understanding that users should be cautioned that their department will have to pay for any AI Agent usage.
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