Compass Point: Dataverse, Headless Office, and Flex Spend

Before joining Directions, Mary Jo has worked as a technology journalist for 40+ years and has focused on covering Microsoft... more

Welcome to the first installment of the monthly Directions on Microsoft Compass Point report, where we look ahead at emerging Microsoft technologies and product strategies that may impact your operations in the future.

Dataverse Integration Could Bring Business Data and Context to Copilot

Quick Take: The Dataverse cloud database that underlies Power Platform and Dynamics is being more tightly integrated with Microsoft 365 Copilot to enhance agents by leveraging business data and context.

Microsoft is working to integrate the Dataverse cloud database underlying Power Platform and Dynamics with Microsoft 365 Copilot. By integrating business data and context with Copilot-synthesized signals from email, chat, and files, Microsoft can make business context available to Copilots and agents so they become more useful and trainable.

Users can do this to some extent today with custom extensions and connectors. But native integration will finally put business data and work data on the path to full cross-pollination. Business context will be available to Copilot and agents, making them more useful.

The coming Dataverse integration is described in more detail in a recent Windows Forum post:

“The company (Microsoft) is building a layered model: business data in Microsoft 365 Copilot for end users, semantic models and Business Skills for makers, MCP connectivity for extensibility, and coding-agent plugins for developers. It is a full-stack attempt to make Dataverse legible to machines.”

In this integrated environment, a user can ask Copilot a question like “What is going on with this customer?” and be presented with account history, open support cases, relevant internal documents, and recent chat histories with the customer.

Dataverse data integration with M365 Copilot is still listed as rolling out in September, according to the Microsoft 365 roadmap. Integration between Dataverse tables and Copilot Studio (and Copilot Studio agents) already exists, as Windows Forum notes.

While the coming M365 Copilot-Dataverse integration sounds promising, the hard part is building the semantic layer with business definitions– something most companies struggle to do and maintain. Expecting Copilot to understand that revenue, sales, and turnover have the same or different meanings, depending on the business, will result in inconsistent answers.

The risk is two people present different numbers for the presumably the same metric at a meeting with the CFO, because they asked the question differently. AI works best when there’s clarity. And that means defining your business data in clear terms. A new challenge for everyone.

Whatever Happened to the Idea of “Headless” Office?

Quick Take: What’s Microsoft’s plan (if any) to make Office data available as a back-end service, accessible directly via agents without needing users to employ Outlook, SharePoint, or other applications.

You may have heard of headless CRM (thanks to Salesforce) or headless commerce (courtesy of SAP). Less well-known is the concept of “headless Office,” which Microsoft CEO Satya Nadella talked about at a Morgan Stanley tech conference appearance back on March 4.

During the event, Nadella was asked about the future of Office and mentioned that Microsoft was contemplating going headless with Office. He said “the next Office, which is bigger than all of the Office that came before, may be headless. And that is sort of going to be the TAM (total addressable market) expansive part for us.”

Microsoft execs haven’t mentioned headless Office since, but they are working on the idea of making Office data available as a back-end service, which could be accessed directly via agents, rather than the traditional Office desktop apps, as part of the Copilot Super App effort.

As Microsoft Executive Vice President Charles Lamanna, a member of the company’s Copilot Leadership Team, said recently, Microsoft looks at its Work IQ intelligence layer as a kind of “headless version of Microsoft 365.” Work IQ allows agents to work directly against mailboxes, files, documents, and organizational knowledge without needing users to enter Outlook, SharePoint, or other applications.

Are the familiar Office applications and their UIs going away? No, but we may be moving into a world where Outlook, SharePoint, Dynamics, and other Microsoft services become infrastructure and the Copilot layer increasingly becomes the user experience.

Flex Spend Plans: Another Cloud Consumption Cost Payment Option

Quick Take: With consumption-based pricing becoming the norm for many Microsoft cloud products, programs to help customers budget and forecast spending are expanding.

Microsoft is testing a mechanism with its Cloud Solution Provider (CSP) partners called Flex Spend Plans, which is meant to help drive consumption of cloud services by trading commitments for discounts.

Here is Microsoft’s pitch to partners:

“Unlike traditional Reserved Instances or Azure Savings Plans, a single Flex Spend Plan can cover multiple eligible products and services at the service family, service, product, or individual SKU level. This feature makes Flex Spend Plans ideal for partners looking to drive consumption growth, support workload expansion, and offer competitive pricing to customers.”

While Microsoft’s Reserved Instances licensing option addresses customers with known, long-term usage requirements for specific Azure resources, Savings Plans are about flexible commitments across eligible services with changing usage patterns. The newer Pre-Purchase Plan (P3) commits a defined amount of consumption over time, according to the company. But Flex Spend Plans address “broader capabilities, such as multi-service coverage, monthly billing, flexible consumption across the commitment term, and auto-renewal when the commitment is exhausted,” Microsoft’s documentation says.

The monthly billing element of the Flex Spend Plans may make them a non-starter for some customers who typically rely on longer-term purchasing contracts. But with consumption-based billing becoming more important as agent footprints expand, they could end up being an option for some.

Microsoft began allowing partners to test the Flex Spend Plan experiences, APIs, and reconciliation attributes in a sandbox environment this month. The general availability date for them is not yet public.

Got any Microsoft technologies or strategies on YOUR radar that you’d like to hear more about? Drop us a note and we can try to find out more and share it here.

by
Mary Jo Foley

Before joining Directions, Mary Jo has worked as a technology journalist for 40+ years and has focused on covering Microsoft exclusively for the majority of her career. Mary Jo holds... more