When it comes to licensing, the devil is always in the details. A year or so ago (maybe longer?), Microsoft introduced the New Commerce Experience (NCE) for licensing of cloud applications. Some of the key changes with NCE was the introduction of different pricing for monthly vs. annual (or triennial) subscriptions.

Generally speaking, any user-based cloud SKU licensed monthly costs 20% higher than the same app licensed annually (or triennially). Further, some SKU can be paid month-to-month even when licensed for an annual or triennial term, while others must be paid for in full for the entire term at the time of purchase. Also, SKUs licensed on annual or triennial terms cannot be cancelled nor can the user count be reduced after the first 7 days.

Now, with an understanding of how NCE licensing works, let's explore how Microsoft allows you to acquire licenses for Copilot for Microsoft 365 as well as Copilot Studio:

Copilot for Microsoft 365:

  • There is no trial version
  • Pricing in the US is $360/user/year (shown as $30/user/month on all marketing material) and it is only available for an annual term paid up-front
    • Edit: As of December 2024, a monthly payment option has been added but it is still an annual term. The monthly pricing is 5% higher at $31.50/user/month
  • As with all Microsoft NCE (New Commerce Experience) licenses, annual term licenses cannot be cancelled nor can the seat count be reduced after the first 7 days (cancelling within 7 days also incurs a prorated charge)
  • Licenses can be assigned to another user at any time
  • This license enables Copilot BizChat (Business Chat) "Work", as well as Copilot experiences in Word, Excel, PowerPoint, Outlook and OneNote
  • Note: This SKU is not to be confused with Copilot Pro, which is the consumer version for personal and home users of Microsoft apps. This license can only be purchased directly through Microsoft and not through Microsoft Partners. Copilot Pro also does not offer Enterprise Data Protection (EDP) which is available with the M365 Copilot.

Copilot Studio:

  • Trial version available for 30 days; can be extended for another 30 days
  • Copilots / Agents created during the trial phase will remain available for a further 90 days after the expiration of the trial period
  • Pricing Model 1:
    • Pricing in the US is shown as $200/tenant/month on marketing materials
    • Available in annual term ($2,400/tenant/year) payable up-front or month-to-month; not available in triennial term
    • Also available in month-to-month term ($240/tenant/month)
    • This license includes a capacity of 25,000 messages per month
    • To enable one or more authors or users to create agents / copilots, the Copilot Studio tenant license must be paired with $0 (free) Copilot Studio user licenses, and these must be assigned to each author.
  • Pricing Model 2:
    • At Ignite 2024, Microsoft announce a Pay-As-You-Go option for Copilot Studio. See related post here.
    • Pricing is a simple $0.01 per message billed through an Azure subscription
    • Unlike Pricing Model 1, there is no upfront cost
    • The Pay-As-You-Go pricing cannot be used in the "Default Environment" in a tenant. You must create an additional Power Platform environment
  • A message is any communication sent or received by the user in a conversation with an Agent. Each communication typically costs 1 message, but AI generated responses cost 2 message
  • Conversations in the Test / debug window of Copilot Studio do not cost any messages
  • Conversations in Teams or Copilot BizChat (Business Chat) also do not cost any messages if the user has an active Copilot for Microsoft 365 license
  • Additional capacity can be purchased in the form of bundles of messages, but the pricing on this is unclear