The price point? An additional $30 per user per year of the company’s Microsoft 365 bundle of cloud-based business-software offerings. While the technology is impressive, the amount of funding this could require for some businesses is staggering and plants a small seed of doubt about its cost justification.
It is an AI assistant feature that can be used across any Microsoft 365 application and service, which now extends to Bing and Edge. It uses a large language model to assist people in the creation of different assets, reading and summarizing emails, creating presentations, and more.
The main draw that Microsoft has advertised up to this point is the enhanced productivity that Copilot provides. It can memorize your tone in emails, help create summaries for important videos or notes, remind you of important meetings, and find the files you need for a project with minimal input.
It doesn’t stop there, as Microsoft is introducing a version of the Copilot chatbot for the Bing search engine specifically tailored to business customers. This comes alongside a partnership with Meta Platforms to make the Facebook parent’s AI language model available to developers who are building software on Azure platforms.
The unveiling of the pricing model alone increased Microsoft stock by 4%, which, for a company as large as Microsoft, is no small amount. The upturn in the market in response to the price reveal may seem excessive for a simple AI, but Microsoft is fixated on profitability over functionality.
Since the unveiling of Copilot in March of 2023, the largest question looming over consumers heads has been how Microsoft intends to turn their AI ambitions into a profitable business line. The answer, which was announced in late September, is the $30 per head price point as mentioned previously. Companies that are already monitoring their tech spending can’t afford to spend much more on assets like this, especially when it comparatively costs 53-240% more than the various editions of the current 365 bundle.
The products they create are used by companies large and small, and Copilot has been in testing with a variety of their largest clients over the past few months. Early adopters will not be “beta testers” for this new product, but it isn’t going to be perfect. Since the AI is capable of automating tasks like PowerPoint creation, spreadsheet analysis, and email replies with your tone in mind, the benefits and time saved could outweigh the cost for some companies.
While a lower price for Copilot could lead to a wider range of adoption, this also runs the risk of cutting into Microsoft’s profit margins, something that the company’s investors are loathe to do. A quick glance at the current state of their Unified Support services is enough to prove that point. Powering generative AI services like Copilot is demanding from a research and computing standpoint, so it being expensive isn’t a total surprise. However, while Microsoft’s revenue growth has lowered recently due to the global economic decrease, their operating margin is expected to stay above 40% for at least the next two years.
Microsoft isn’t shy about spending money if it means long-term growth, as they are currently embroiled in a legal battle to acquire Activision Blizzard. To see them opt against a lower priced launch for a wider audience shows that they are attempting to recoup lost revenue on an expensive upfront launch and hoping that others see the value and adopt later. After all, if they are the only one offering something like this, which up until the last few years was true of their Premier/Unified Support, then they have full control of the price.
If many of your employees are mired in spreadsheets, emails, and PowerPoints on a consistent basis, then it may be worth an early adoption. However, it’s prudent to save money when possible. If opting into Copilot isn’t in the budget but could lead to greater success down the road, there may be other ways to save money. US Cloud is the leading Microsoft Support alternative, providing your company the personalized support and cost savings necessary to adopt important initiatives like Copilot. The 30-50% we save you on support could go towards integrating Copilot into your daily process. While Microsoft is leading the charge on business AI, US Cloud is at the forefront of Microsoft Support expertise.