Microsoft hints on its pricing and licensing plans for its business Copilot AI technology
Microsoft has used the first several months of this year to blast its AI messaging on the business and consumer fronts. While its Bing chatbot and Microsoft Designer consumer Copilot AI assistants are in public preview — and even shipping commercially in the case of its developer-focused GitHub Copilot — its other business-focused Copilots are in private preview with a small set of customers. Microsoft officials have continued to decline to talk about plans for public previews, pricing, and licensing for Microsoft 365 Copilot and Dynamics 365 Copilot.
But during the company's Q3 FY'23 analyst call on April 25, Microsoft executives dropped a few hints about the company's thinking about pricing and licensing for its Microsoft 365, Dynamics 365, Viva and Security Copilot capabilities. And just because Directions on Microsofthas been asked this several times already: These Copilot capabilities definitely are not going to be free. They will be priced as add-ons on top of existing subscriptions like Microsoft 365 E3 and/E5.
"When we believe we’re adding a lot of value, and frankly, that’s what the Copilots are doing and some productivity improvement, you can expect that we will have a list price for those," said Microsoft Chief Financial Officer Amy Hood in response to a Wall Street analyst's question during yesterday's call.
CEO Satya Nadella added that the model Microsoft is using with GitHub Copilot is a good indicator of where the company will likely go with its other business-focused Copilot capabilities. (Nadella did not say if Microsoft would match the GitHub Copilot pricing exactly, however.)
Nadella told analysts:
"The Copilot that’s priced, and it is there, is GitHub Copilot. That’s a good example of incrementally how we monetize the price lists out there, and others are to be priced, because we are in preview mode. But you can expect us to do what we’ve done with GitHub Copilot pretty much across the board."
Microsoft sells GitHub Copilot, its developer-focused AI pair-programming technology, for US$10 per user per month (or US$100 per user per year) for individuals. GitHub Copilot plugs directly into developer's’ editors. And GitHub Copilot for Business is US$19 per user per month. For that price, developers get everything in Copilot for Individuals, plus license management, organization-wide policy management, privacy capabilities, and VPN support.
Nadella said yesterday that Microsoft has had more than 10,000 organizations "sign up" for GitHub Copilot for Business since it became broadly available close to three months ago. Microsoft has announced it will be adding more Copilot AI assistant capabilities to GitHub Copilot via its GitHub Copilot X initiative, which is now in technical preview.
Microsoft has demonstrated publicly via various demos how Copilot could improve customers' experiences with everything from security analysis to PowerPoint deck creation. Microsoft officials have insisted that Copilot is more than just OpenAI’s ChatGPT embedded into Microsoft 365. The official description of the Microsoft 365 Copilot "System": "It’s a sophisticated processing and orchestration engine working behind the scenes to combine the power of large language models (LLMs), including GPT-4, with the Microsoft 365 apps and your business data in the Microsoft Graph — now accessible to everyone through natural language."
Unsurprisingly, Microsoft focused heavily on its AI investments during its Q3 earnings announcement. Officials said the company has more than 2,500 customers for its Azure OpenAI service, which builds on top of its customer OpenAI's GPT-3/4 technology. In March 2023, Microsoft execs said they had more than 1,000 customers using Azure OpenAI. While Azure growth continues to slow, as Microsoft had warned it would, Azure and "other" cloud services grew 27 percent compared to the year-ago quarter. (One year ago, that Azure growth number was 46 percent.)
Microsoft officials didn't say on the call when the company will release its business-focused AI Copilots in public preview or commercially. Recently, officials said to expect the Viva Copilot capabilities to ship later this year. And a closer look at the Dynamics 365 release plan roadmap notes that several of the announced Dynamics Copilot capabilities have begun moving into public preview and are slated to ship this summer. The near-term delivery date for the Dynamics 365 Copilot features could be due to them being more of a rebranding of announced and in-preview features with the Copilot name, as Directions has noted.