What is Copilot for Microsoft 365?
Copilot for Microsoft 365 is Microsoft’s AI assistant for Word, Excel, PowerPoint, Outlook and Teams. Microsoft now sells it as Microsoft 365 Copilot.
It works inside the apps you already use. You type a request, and Copilot drafts a document, analyses a spreadsheet, builds slides or recaps a meeting. With a paid licence, its chat is grounded in your organisation’s files, emails and meetings.
Key Features
Copilot for Microsoft 365, now Microsoft 365 Copilot, combines AI inside Word, Excel, PowerPoint, Outlook and Teams with free web-grounded Copilot Chat, work-grounded chat through Work IQ, pre-built agents and custom agent tools.
- Copilot in the apps: Works inside Word, Excel, PowerPoint, Outlook, Teams and OneNote on the paid licence, so it drafts documents, analyses spreadsheets, builds slides and recaps meetings without leaving the app.
- Copilot Chat: Provides secure, web-grounded AI chat at no extra cost with an eligible Microsoft 365 subscription and a Microsoft Entra account. It includes enterprise data protection, and agents are charged on a metered basis.
- Work-grounded chat: Answers from your organisation’s own context on paid licences through Work IQ, which Microsoft says covers company information, team roles and project details. Free Copilot Chat is grounded in the web only.
- Pre-built agents: Researcher, Analyst and Facilitator come with paid licences for research and data analysis that needs reasoning. The $30 enterprise licence also lists Sales, Service and Finance agents.
- Custom agents: Agent Builder creates an agent from a plain-language description, which Microsoft says takes minutes, and Copilot Studio handles more advanced builds. Both are listed for Copilot Chat as well as paid licences.
- Model choice: Paid licences include a choice of AI models. Microsoft says an automatic option weighs accuracy, speed and cost to select a suitable model for each task, so users need not pick one.
- Search and Notebooks: Full Search and Notebooks capabilities come with the $30 Microsoft 365 Copilot licence. Copilot Chat users receive limited versions of both, along with memory, personalisation and voice.
- Adoption analytics: Reports adoption, usage and business impact on paid licences, so administrators can see whether the seats they bought are being used. Copilot Chat includes only limited analytics.
Pros
Copilot for Microsoft 365’s main advantages are that it works inside the Office apps staff already use, answers from the organisation’s own data and carries Microsoft’s documented privacy and compliance commitments.
- No new app to learn: Copilot sits inside Word, Excel, PowerPoint, Outlook and Teams on desktop, tablet, mobile and web, so staff use it in the tools they already open every day.
- Uses your own content: Paid-licence chat draws on your organisation’s files, emails and meetings through Work IQ. A general chatbot needs the same documents uploaded before it can answer.
- Free chat tier: Copilot Chat costs nothing extra with an eligible Microsoft 365 subscription and a Microsoft Entra account, which lets a company trial AI chat with enterprise data protection before buying licences.
- Respects file permissions: Microsoft’s documentation states that Copilot only surfaces organisational data that the individual user has at least view permission for, so it follows existing access controls.
- No training on your data: Microsoft states that prompts, responses and data accessed through Microsoft Graph are not used to train foundation models, and that customer content is encrypted at rest and in transit.
- Documented compliance: Microsoft says Microsoft 365 Copilot meets its existing commercial commitments, including GDPR, and is an EU Data Boundary service for European Union customers.
- Bundles for small firms: Business Standard with Copilot costs $23.50 and Business Premium with Copilot $32 per user a month on annual billing, which puts the apps and Copilot on one licence.
Cons
Copilot for Microsoft 365’s main drawbacks are cost and complexity: the full licence is $30 per user a month on top of a qualifying Microsoft 365 plan, and the line-up of plans keeps changing.
- Extra cost per user: The enterprise licence costs $30 per user a month, paid yearly, on top of a qualifying Microsoft 365 plan. A 100-person rollout adds $36,000 a year before the base subscriptions.
- Needs a qualifying plan: Microsoft 365 Copilot and Copilot Business are add-ons that require a separate licence for a qualifying Microsoft 365 plan, so neither can be bought alone.
- Promotional price ends: The $18 Copilot Business price is a first-year offer for existing Microsoft 365 Business customers, available from 1 July to 31 December 2026. The regular price is $21 on annual billing.
- Monthly billing costs more: Headline prices assume an annual commitment. Paying monthly raises Copilot Business to $25.20 and Business Standard with Copilot to $28.20 per user, about 20% more.
- Free tier is limited: Copilot Chat has limited Search, Notebooks and analytics, and its agents are metered. Microsoft notes that availability in Word, Excel, PowerPoint and OneNote varies by market and licensing.
- Confusing line-up: The product has been renamed, and buyers now choose between Copilot Chat, Copilot Business, two Business bundles and the enterprise licence. Business options are capped at 300 users.
- Output needs review: Drafts, summaries and spreadsheet figures can contain errors, so every result needs a human check before it is shared with a client or used in a decision.
Who is Using Copilot for Microsoft 365?
- Office workers: Draft documents and reply to email faster.
- Analysts: Explore spreadsheet data with plain questions.
- Managers: Catch up on meetings and long threads.
- Small businesses: Add AI through the Business add-on.
Pricing
Copilot for Microsoft 365 costs $18 to $30 per user per month on top of a qualifying plan (official prices, October 2026).
| Plan | Price | What you get |
|---|---|---|
| Microsoft 365 Copilot Chat | Free with an eligible subscription | Web-grounded chat, metered agents |
| Microsoft 365 Copilot Business | $18 / user / month, annual (promotion; regularly $21) | Add-on for Business plans: apps, Work IQ, agents |
| Business Standard with Copilot | $23.50 / user / month, annual | Apps and Copilot bundled |
| Microsoft 365 Copilot | $30 / user / month, annual | Enterprise add-on with Copilot Studio agents |
Disclaimer: Pricing can change. Check the official Microsoft website.
What Makes Copilot for Microsoft 365 Unique?
Copilot for Microsoft 365 stands out because it works directly on the documents, emails and meetings a company already keeps in Microsoft 365. A general chatbot needs files uploaded, while Copilot reaches what you may already open.
Compatibilities and Integrations
- Apps: Word, Excel, PowerPoint, Outlook and Teams.
- Devices: Desktop, tablet, mobile and web.
- Agents: Copilot Studio for custom agents.
- Requirement: A qualifying Microsoft 365 plan per user.
Copilot for Microsoft 365 Tutorials
You can learn how to use Copilot for Microsoft 365 in a short session:
- Ask your administrator to assign a Copilot licence.
- Open Word, Excel, Outlook or Teams and select the Copilot button.
- Describe the task and name the files it should use.
- Check the draft, correct it and ask for changes.
How We Rated It
| Criterion | Score | Why |
|---|---|---|
| Accuracy and Reliability | 4.2/5 | Grounded in work data |
| Ease of Use | 4.5/5 | Inside familiar apps |
| Functionality and Features | 4.7/5 | Apps, chat and agents |
| Performance and Speed | 4.2/5 | Depends on the app |
| Customization and Flexibility | 4.4/5 | Agents and Copilot Studio |
| Data Privacy and Security | 4.5/5 | Enterprise controls |
| Support and Resources | 4.6/5 | Extensive Microsoft documentation |
| Cost-Efficiency | 3.7/5 | Add-on per user |
| Integration Capabilities | 4.6/5 | Deep in Microsoft 365 |
| Overall Score | 4.4/5 | Average of the nine criteria |
Summary
Copilot for Microsoft 365 suits organisations that already work in Microsoft 365 and want AI inside those apps. Start with the free Copilot Chat, then license the people who will use it daily. Review its output before sharing, and confirm current prices with Microsoft or your reseller.
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