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A Look into Microsoft 365 Copilot’s Licensing

Updated: Feb 22

Updated Jan 18, 2024


Understanding the licensing costs behind the groundbreaking AI solution.


Microsoft 365 has become an indispensable tool for organizations and individuals alike—particularly in today’s digitally connected world. The suite of cloud-based productivity applications empowers users with the tools needed to work efficiently and collaborate seamlessly. The release of Microsoft 365 Copilot, Microsoft’s generative AI assistant, is empowering organizations to further improve work experience, cater more effectively to diverse user and customer needs, enhance decision-making, and more.


After the announcement that Microsoft Copilot is now generally available, organizations are eager to understand the cost of the platform as well as the economic benefits the solution will provide. Below, we’ll take a look into Copilot’s licensing options and their costs; we’ll also explain the licensing requirements needed for organizations to get the most from the solution.


micrsooft 365 copilot licensing


Copilot Licensing Requirements

Microsoft Copilot is an add-on to users and organizations that currently have Microsoft 365 E3 or Microsoft 365 E5 licenses.


In addition to the licenses mentioned above, organizations must meet the following prerequisites:


  • Deploy Microsoft applications: The following applications need to be deployed for respective users. This ensures the applications can seamlessly integrate with Copilot and gather critical data:

    • Word

    • Excel

    • PowerPoint

    • Outlook

    • Microsoft Teams

    • OneDrive

    • SharePoint

    • Exchange

  • Have an active OneDrive account: Users must have an active OneDrive account for Copilot features such as sharing and saving files to work.

  • Install new Outlook for Windows: For Copilot to work seamlessly with Outlook, users must have the new Outlook for Windows installed. Users do have the option of switching to Outlook Mobile to access the new experience.

  • Use Microsoft Teams: As mentioned above, organizations need to be using Microsoft Teams desktop client or web client version.

  • Enable Microsoft Loop: In addition to Teams, organizations need to have Microsoft Loop enabled for their tenant.


mirosoft copilot screenshots

Copilot Cost

Per the release in November 2023, Copilot is now available to businesses for $30 per user per month. However, as mentioned above, organizations will need to have a Microsoft 365 E3, E5, or Microsoft 365 Business license prior to adding Copilot to their technology stack.


Because of these requirements, organizations may face a significant increase in their monthly subscription cost—particularly if they need to upgrade their base license from Office 365 to Microsoft 365. The table below shows the additional cost for organizations of varying sizes to upgrade from Office 365 E3 to Office 365 E3 with Copilot:


Platform

Monthly Costs

Number of Users

Current Annual Cost with Office 365 E3

Upgrade to Office 365 E3


Add Copilot

Total Cost to Upgrade

Office 365 E3

$23.00

5,000

$1,380,000

$780,000

$1,800,000

$2,580,000

Microsoft d365 E3

$36.00

10,000

$2,760,000

​$1,560,000

$3,600,000

$5,160,000

Microsoft 365 Copilot

$30.00

25,000

$6,900,000

$3,900,000

$9,000,000

$12,900,000

It’s important to note the costs above are based on list prices and on the assumption that all users with an organization will need to be upgraded. Depending on a user's role, not everyone may need a Copilot license or need to upgrade to Office 365 E3.


Implement the Right Licenses with Help from a Professional

Building a licensing portfolio that balances both organization and user requirements and costs can be difficult. It requires organizations to carefully evaluate their needs and consider factors such as security, compliance, user roles, and the need for advanced productivity tools or capabilities.


The good news: Microsoft offers a wide spectrum of licensing options to cater to businesses’ unique needs. This ensures they’re able to maximize productivity and collaboration while adhering to budget constraints. JourneyTEAM simplifies the process further by creating licensing packages that perfectly align with the organization’s goals.


Immerse yourself in the benefits and functionalities of Microsoft 365 Copilot with this blog.




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