Microsoft 365 Copilot: What is the ROI?

So, who is excited then? Microsoft 365 Copilot will be officially GA from 1st of November 2023 at a cost of $30 per user per month for commercial customers. That is THIS week!!!

How much will Microsoft 365 CoPilot cost?

Microsoft continue to be firm that any organisation that invests in Microsoft 365 Copilot from the 1st of November will pay $30 per user per month. Note that initially, the licensing will not appear on a price list and must be purchased alongside the organisations Microsoft Account team. There is a minimum number of seats of three hundred.

When will Microsoft 365 Copilot be released?

Microsoft 365 Copilot will be generally available from 1st November 2023. There have been several hundred large organisations on a paid (around $100,000) Early Access Preview since the summer who have been helping Microsoft with performance, accuracy and tuning guidance as well as helping Microsoft to capture and prove use-cases and guidance for other future organisations and to help them justify the cost of ownership. I am sure that next year, we will see a Total Economic study from Microsoft and Forrester on this!!

Note: Initially, Microsoft 365 Copilot will not be available to EDU customers or in the government/Gallatin clouds. All apps, except for Copilot in Excel, will be available in the
following languages: English (US, GB, AU, CA, IN), Spanish (Spain, Mexico), Japanese, French (France, Canada), German, Portuguese (Brazil), Italian, and Chinese Simplified. Copilot in Excel is currently only available in English. Support for additional languages will be extended through the first few months of calendar year 2024.

Copilot is very new. As such expect it to evolve quickly and get better…

The ROI of Microsoft 365 Copilot.

Even after the 1st of November, most organisations, Microsoft partners and many of Microsoft, will still not have access to Microsoft 365 Copilot. There have been those on the paid early access program, some of the global solution partners have also been involved.

Due to the minimum limit of three hundred licenses, I expect that many organisations may wait a little rather than rush in. Wait until they are ready, they can learn from other organisations successes and blips and (I imagine) for the entry point to be lowered and in fact I have heard rumours that this might drop to fifty.
Note: Smaller organisations and anyone who buys licensing via a CSP provider will also have to wait a bit.

There is plenty of information out there to help organisations start strategizing and preparing for what will be one of the most significant uplifts (both in cost of their Microsoft 365 license, and in capability) in the history of IT and IT budgets.

The questions of course that the CFO and CEO will want to understand are

  1. What will the actual cost be?
  2. How will affect our bottom line?
  3. Are the perceived benefits worth the price?
  4. How can we keep our Microsoft licensing costs under control?
  5. What do we need to do to make sure we can really get the best from Microsoft 365 Copilot.

1. Understanding the cost of Microsoft 365

Microsoft Copilot is an add-on license – meaning it is purchased (at $30 per user per month) and applied to a base-level license. Also, not every Microsoft 365 license will be eligible for a Copilot “bolt-on”. Currently Microsoft 365 Copilot can only be attached to:

  • Microsoft 365 E5,
  • Microsoft 365 E3,
  • Microsoft 365 Business Premium,
  • Microsoft 365 Business Standard.

Whilst the above is good news for smaller businesses (in that they dont need to upgrader to an E3 or E5 base license), the cost is (currently) the same regardless of what base-level license you are attaching it to. This means the cost uplift (as a percentage) is much higher for organisations on Microsoft 365 E3 or Microsoft 365 Business. Nothing is of course set-in-stone as we are still in early preview, and we might see pricing changes or tiering as we get nearer to release. I’d also expect customers on large Enterprise Agreement to pay less (and be able to haggle!).

Frontline workers (or anyone with a Microsoft 365 “F” license) are not currently able to use Copilot without being upgraded to an enterprise E3, which means a cost difference (for M365 E3 plus Copilot) of a staggering 8.25x.

If we look at the cost of the current licenses and the effect of adding Copilot to every user, then the costs can look scary (this is based on Online RRP pricing).

Base LicenseBase CostM365 Copilot*License + Copilot% Increase
Microsoft 365 E5£52.40£25£77.4048%
Microsoft 365 E3£33.10£25£58.1076%
Microsoft 365 Business Premium£18.10£25£42.10133%
Microsoft 365 Business Standard£10.30£25£35.30242%
Costs before and after Microsoft 365 Copilot (pupm RRP).

Things to note:

  1. Microsoft 365 Copilot is optional – it’s your choice as to whether you invest in it or not, but it is not and will not be included in any of the base licences – for some AI features in Bing Chat or the use of ChatGPT may be enough.
  2. You don’t (and won’t) need to buy it for every employee – persona mapping and use case studies will be vital to determine who is likely to benefits most.
  3. The pricing for Copilot for Business SKUs may change (as will the rest of the pricing)
  4. Organisations may be able to “fund” their Copilot investment through savings in smart licensing procurement and consolidation of third-party products (especially for M365 E5 organisations). We are seeing a lot of this and makes sense if you have most of your “eggs” in the Microsoft Cloud Basket.

2. How will Copilot affect our bottom line?

One of the recurring questions I get asked when talking to organisations about Microsoft 365 Copilot is “how can we ensure we get a measurable ROI when planning for or investing in Microsoft Copilot?”

Even so, adding $30 (around £25 pupm) to your existing productivity toolset does seems a lot, especially if you are paying for M365 E5 + Teams Premium + Calling Plan already, plus of course things like Microsoft Viva Suite, etc.

At Microsoft’s recent Envision event in London, Microsoft talked a lot about usecases from customers on the Early Access programme, talking about various diffferent use cases that improve work experience, remove creative blocks and speed up decision-making across a number of different sectors including retail and finance.

So – from an ROI perspectives some of the maths you may look at are:

  • Assume a sales exec, data analyst or admin position that earns £50,000 annual salary.
  • With Microsoft 365 Copilot at $30 a month, thats ~$1 a day or ~80p in UK money. If we also assume the normal 250 working days a year then that equates to ~£200/day or ~£25/hr.
  • If these “roles” can each save just two hours a month using Copilot to sumamrise meetings, take notes, automate and send a customer propsosal out, then that is already a productivity saving (in time) of 2:1 or £50 per person per month.

I have already heard other organisations share ROI stories for the use of ChatGPT Premium since its commercial introduction with organisations reporting ROI’s of over 25:1 on a $20 pupm subscription. Given the extensive enterprise data integration and interaction into the Microsoft 365 apps and services that Copilot will bring out of the box, I would not be suprised to see ROIs (once studies are done) of more than 30:1

There is then a moral and emotional play here too. Everyone loves a productivity gain [I think there will be loads], but there may also be instances where entire roles (or aspects of roles) may no longer needed because AI will do that part of the job for us. The same goes to be honest for automation technologies like Power Automate. Then is there the case, where you as an organisation (whether you are involved in B2B or B2C) may win more business because you have “the power of AI” either helping make decisions, responding to a client/customer faster or helping you make sales faster by directly interfacing with the customer or following up on things.

Advice is to ensure you work with Microsoft and your partner(s) to identify which departments or individuals are likely to benefit the most from the features within Microsoft Copilot’s features and make sure they are part of a pilot.

This usually starts with a well thought out and managed pilot programme during which you’ll be looking at identifying, testing, and proving the potential timesaving and productivity gains it can bring to roles like sales, finance, and your data teams.

3. Are the perceived benefits worth the price?

I think so – but again this will all loop back to the point above. Whilst it wont just be about price, these GenAI tools are likely to improve the way most people work. These pilot phases, will require organisations to explore and experiment with Copilot’s features and capabilities to discover new ways to enhance their work experience.

Using these tools also requires that users are on-board, educated and informed. As such, once you have identifyied the most suitable users and scenarios for the “pilot”, you’ll need to ensure you provide adequate training and support and closely monitor and measure the outcomes and champion quick wins whilst soliciting feedback and suggestions from employees.

A report on the early findings on the promise of Generative Al put together by Harvard Business School and Boston Consulting Group found that Generative Al in the workplace lead to a:

  • 12.2% increase in task completion rates
  • 25.1 % decrease in time spent to complete tasks
  • 12.5% increase in the number of subtasks completed
  • 40% increase in the quality of responses to subtasks

4. How do we keep our costs under control?

A good question…let’s look at cost reduction to free budget (either for cakes, salary rises, bottom line or, yes, Copilot).

Organisations may be able to “fund” their Copilot investment through savings in smart licensing procurement and consolidation of third-party products (especially for M365 E5 organisations). We are seeing a lot of this and makes sense if you have most of your “eggs” in the Microsoft Cloud Basket.

Mch of the above is general good practice but I’m seeing lots of organisations looking at this to “free” budget to drive Copilot “pilots”.

5. What do we need to do to make to get the best from Copilot?

I have covered this before in previous blogs and videos, but in short the key focus organisations need to do outside of runing a pilot, training users and streamlining how you fund it, is data data data.

The key advantage that Microsoft Copilot will have over its rivals is that it seemlessly integrates with Microsoft 365 applications and uses enterprise data to provide personalised and contextual assistance. As such, ensuring your data is accessible (in the cloud or cloud connected at least), managed correctly, classified, labelled and protected. I have covered this a few times here.

Successful adoption of Microsoft 365 Copilot is much more than the technology and licensing. Organisations need to see this as a significant technology project and not just a product you buy. As such they key activies critival to success are:

  • Having a defined vision and identification of how Microsoft 365 Copilot will be used
  • Obtain proactive support from key roles in the organisation to accelerate the use of Copilot. including senior leadership, legal, IT and key Business Development Managers.
  • Enable Champions and provide business relevant, snackable and on-demand training for end users this includes leveraging the “power of the prompt”.
  • Raised awareness through launch event & omni-channel communications planning.

Copilot Q&A

Will CoPilot be included in Microsoft E5?

No, Microsoft 365 Copilot is not included in the Microsoft 365 E5 license. Microsoft 365 Copilot is an add-on license at an additional cost [$30] irrespective of the Microsoft 365 licenses you have within your organisation. This means that even if you are on Microsoft 365 E5, you will need to pay for it separately if you decide to implement and use it.

Whats the minimum number of licenses we can buy?

Currently the minimum liceses you will be able to buy from 1st November is three hundred at a cost of $30 pupm.

Will there be free trails?

No – at the moment Microsoft have confirmed that trials will not be available.

Will I be able to get Microsoft 365 Copilot for free?

If you do – let me know!!

No… as of the information available, Microsoft 365 Copilot will not be available for free. At the time of writing, there are six hundred organisations globally that are currently on an Early Access Programme, and they all paid $100,000 for the preview. Microsoft Copilot is positioned as a premium add-on with huge substantial benefits. The initially announced price is $30 per user per month, but it’s this price is not yet finalised, and we don’t know if different sectors or license volumes will affect the price.

We don’t have Microsoft 365 – can we still use Copilot?

No, Microsoft 365 Copilot will only be available for organisations that use Microsoft 365 Business, Business premium, Enterprise E3 or Enterprise E5. I is not availbale for organisation of Office only plans, or Front-line worker SKUs (Microsoft 365 F SKUS).

We also do not yet know the intentions Microsoft have for Copilot with Education and Not for Profit organisations.

Will I be able to negotiate the price for Microsoft 365 Copilot?

It depends. The size of your organisation, the level of your base licensing and demand will all likley affect what you pay for Microsoft 365. I suspect the largest organisations – those with huge Enterprise Agreements will get a better deal than smaller organisations, but I’d expect tie ins to the higher licnese SKUs like Microsoft 365 E5.

My advice is to speak to a product and licensing specialist to work with your Microsoft Account team and who can help you assess your deployment roadmap from various angles.

Summary and Key Points

  • Microsoft 365 Copilot will be available to Enterprise customers at a price of $30 per user per month on top a Microsoft 365 E3 or E5 license.
  • Initially there will be a minimum license purchase of three hundred licenses, Though I have heard that this might get reduced to fifty.
  • Initially it’s only available to Enterprise sized organisations though will be coming to CSP customers and small, medium, and commercial organisations by end of the year.
  • ROI should be significant if Copilot is properly implemented, but organisations need to prepare to pay for this and it’s not “cheap”. Expect Copilot to impact everyone person in the organisation.

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