Microsoft is in the process of Copilotizing Business / Enterprise versions of your Office apps (Word, Excel, PowerPoint, Outlook, and OneNote) even for users that don’t have a Microsoft 365 Copilot License.
Microsoft say that “These updates help make Copilot your true personal AI assistant for work: Whether you’re drafting a document, analyzing a spreadsheet, or catching up on email, Copilot is right there, ready to answer questions, create content, spark ideas, and automate tasks. Here’s what’s new.”

This familiar Copilot sidebar will understand the context of your open files, document, PowerPoint or spreadsheet and helps to draft, summarise, analyse, and brainstorm without having to switch apps or leaving your app.
Copilot Chat in Office
Microsoft is introducing a persistent Copilot Chat pane in the ribbon of all it’s core Microsoft 365 Office apps. It will be be:
- Fully integrated and content-aware, meaning it will tailors responses based on your current open file.
- Including in the Core Microsoft 365 license (no specific Microsoft 365 Copilot license required).
- Will have the ability draft, summarise, assist with content and formulas and of course create and rewrite content.
- Front and centre to your apps removing (Microsoft hope) the need to deploy other “free” AI plugins such as GPT free which might inadvertently share sensitive data outside your organisation. This is key for organisational compliance, governance and privacy.
How it differs from the Microsoft 365 Copilot license?
The “premium” Microsoft 365 Copilot licence still offers all the advanced capabilities that Microsoft 365 Copilot provides today including file and image upload, image generation, and cross-document reasoning, as well as (most importantly), organisational awareness and acess to the Microsoft Graph API (meaning you can search across docs, meetings, people, email). It also provides the deeper analysis tools and custom agents such as Analyst and Researcher.
Why This matters
This brings a number of benefits to users and organisations. Including:
- Streamlined workflows: Users can draft or revise text in Office without opening a browser or switching apps.
- Instant insights: Since users can ask Copilot to analyse data ranges, identify trends, or generate pivot tables in Excel.
- Faster presentations: Users can get help from Copilot to build outlines, suggest visuals, or transform bullet points into speaker notes in PowerPoint.
- Email productivity: By using Copilot in Outlook to summarise long threads, draft replies, or extract action items in seconds.
- A Unified experience: Above all, all users get a single AI assistant across their core Office apps. This helps with training, reduces pressure to deploy 3rd party plugins and aids support.
- Compliance and Governance: keeps data secure knowing that no data is shared online or used to train AI models – a huge risk organisations face when using “free” AI tools such as Gemini or GPT free.
Under the hood: How Copilot Chat works
Context awareness
Copilot Chat works by reading the contents and metadata of your open document in real time, so it knows what you’re working on—even titles, headings, tables, and comments.
Secure Processing
Queries are processed within Microsoft’s trusted cloud environment. No data or prompts ever leaves your organisations compliance boundaries or is used to train Microsoft or OpenAI LLMs
Natural-language interface
Copilot Chat allows the users to type or “speak” questions like “Summarise this report” or “Show me the top three trends in this data set,” and Copilot replies conversationally.
Continuity and history
All your Copilot interactions stay visible in the sidebar, so you can scroll back to previous prompts and refine follow-ups without losing context.

Copilot Chat rollout
- Copilot Chat will start rolling out to Business users with Microsoft 365 Enterprise and Business subscriptions.
- Rollout will start with users running Microsoft Office Current Channel.
- IT Admins may need to enable Copilot Chat in the Microsoft 365 Admin Centre if not already enabled.
- Organisations are advised to work with their training and adoption team (or partner) to ensure this is included in training and update communications.
- Training or IT can Use the Microsoft 365 usage analytics dashboard to track adoption, active users, and common Copilot queries.
With Copilot Chat in Office Apps, do we still need use Microsoft 365 Copilot?
In many cases users that already have Microsoft 365 will not want to give it up. There are many things to consider however when comparing Copilot Chat to Microsoft 365 Copilot. These inckude:
- Whether users want/need to analyse multiple documents or entire SharePoint libraries in one session.
- Build (or use) Copilot Agents (whilst Copilot chat users can do this they are cost option and charged on consumption)
- Rely on GPT-5’s advanced reasoning, creativity, and summarisation capabilities.
- Want built-in image generation or the ability to upload custom files for Copilot to process.
- Use other Microsoft Copilot agents for sales, service, or finance workloads that will soon be bundled.
- Use features like Facilitator, Interpreter and Meeting Recap in Microsoft Teams
- Other advanced features such as Copilot Notebooks.
My Thoughts and Comments
Brining Copilot Chat directly into Office apps should help streamline and standarise IT provision whilst boosting productivity, reduce context-switching, and eliminate routine tasks for all users.
I love that Copilot Chat is now integrated directly into the Microsoft 365 apps and is governed by the Copilot Control System (CCS). CCS is the enterprise-grade portal for IT administrators to secure, manage, and analyse the use of Microsoft 365 Copilot, Copilot Chat, Copilot Studio, and related agents across their business.
Confusion? Training and awareness will be key to ensure users know that they can and can’t do in Copilot based on the license they have. It could become easy for users with a Copilot Chat acess sitting next to a user with Microsoft 365 Copilot to question why they don’t have access to some features where as their colleague does!