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Microsoft Copilot Licensing Guide

Navigate the AI-powered future with the right Copilot licenses for your organization

The Microsoft Copilot Ecosystem

Microsoft offers several Copilot products, each designed for different use cases and user types. Understanding the differences is crucial for planning your AI adoption strategy.

Microsoft 365 Copilot

$30 /user/month

AI assistant integrated into Word, Excel, PowerPoint, Outlook, Teams, and more.

  • Draft documents and emails
  • Analyze Excel data with natural language
  • Create presentations from prompts
  • Summarize Teams meetings
  • Business Chat across M365 data

Copilot Studio

$200 /tenant/month

Build custom copilots and AI agents for your organization.

  • Create custom AI agents
  • Connect to enterprise data sources
  • Extend M365 Copilot with plugins
  • 25,000 messages included
  • Additional capacity available

GitHub Copilot

$19 /user/month

AI pair programmer for developers in VS Code, Visual Studio, and more.

  • Code completion and suggestions
  • Chat interface for coding questions
  • Works with multiple languages
  • Enterprise: $39/user/month
  • Business: $19/user/month

Copilot in Power Platform

Included with premium licenses

AI-assisted app and flow creation in Power Apps and Power Automate.

  • Describe apps in natural language
  • Generate flows from descriptions
  • Included with Power Apps Premium
  • Included with Power Automate Premium

Microsoft 365 Copilot Prerequisites

Microsoft 365 Copilot requires specific base licenses:

Eligible Base License Notes
Microsoft 365 E3/E5 Full enterprise productivity suite
Microsoft 365 Business Basic/Standard/Premium SMB licenses - Copilot available
Office 365 E3/E5 Legacy Office-only enterprise licenses
Microsoft 365 F3 Frontline worker license
Important: M365 Copilot requires a minimum of 300 seats for enterprise agreements. Smaller organizations can purchase through CSP partners or Microsoft 365 Business plans.

Copilot Studio Deep Dive

Copilot Studio enables organizations to build custom AI agents:

Pricing Model

  • Base License: $200/tenant/month includes 25,000 messages
  • Additional Capacity: $100 per 25,000 additional messages
  • Messages Defined: Each user interaction counts as one message

Key Capabilities

  • Custom Copilots: Build AI agents for specific business processes
  • Data Connections: Connect to SharePoint, Dataverse, websites, and more
  • M365 Copilot Extensions: Extend Microsoft 365 Copilot with custom plugins
  • Autonomous Agents: Create AI agents that can take actions on behalf of users
  • Multi-channel Deployment: Deploy to Teams, websites, and other channels
Pro Tip: Copilot Studio is included with Power Virtual Agents licenses. If you already have PVA licenses, you may have Copilot Studio capabilities included.

GitHub Copilot Licensing

GitHub Copilot comes in three tiers:

Tier Price Best For
Individual $10/month or $100/year Individual developers, freelancers
Business $19/user/month Organizations needing admin controls
Enterprise $39/user/month Large enterprises with custom model training

GitHub Copilot Enterprise Features

  • Copilot Chat in GitHub.com: Chat about your codebase directly in GitHub
  • Documentation Search: Get answers from your organization's documentation
  • Pull Request Summaries: AI-generated PR descriptions
  • Fine-tuned Models: Train on your organization's codebase

Copilot for Sales, Service, and Finance

Role-specific Copilots for Dynamics 365:

Copilot for Sales

$50 /user/month

AI assistant for sales teams using Dynamics 365 or Salesforce.

  • Email drafting with CRM context
  • Meeting preparation summaries
  • Opportunity insights
  • Works with Outlook and Teams

Copilot for Service

$50 /user/month

AI-powered customer service for agents.

  • Case summarization
  • Knowledge article suggestions
  • Response drafting
  • Conversation insights

Cost Optimization Strategies

1. Pilot Before Full Rollout

  • Start with a small group of power users
  • Measure productivity gains and adoption
  • Build internal champions before expanding

2. Right-Size Your Deployment

  • Not every user needs M365 Copilot
  • Focus on roles with high document/email volume
  • Consider Copilot for Sales/Service for specialized roles

3. Leverage Included Capabilities

  • Copilot in Power Platform comes with Premium licenses
  • Copilot in Dynamics 365 included in some D365 licenses
  • Free Copilot in Edge and Windows for basic tasks

Data Security and Compliance

Important considerations for Copilot deployment:

  • Data Stays in Your Tenant: M365 Copilot uses your existing M365 security and compliance
  • No Model Training: Your data is not used to train the underlying models
  • Permission-Aware: Copilot respects existing M365 permissions
  • Audit Logging: Copilot interactions are logged in M365 audit logs
Before Deploying M365 Copilot: Review your information governance - Copilot can surface any content a user has access to. Ensure sensitive data is properly protected with labels and permissions.

Additional Resources

Disclaimer: Pricing and licensing information provided on this page is for general guidance only and may not reflect the most current Microsoft pricing or licensing terms. Microsoft frequently updates its licensing models, pricing, and feature inclusions. We are not responsible for any inaccuracies or outdated information. Always verify current pricing and licensing requirements directly with Microsoft's official licensing resources or your Microsoft partner before making purchasing decisions.

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