Microsoft Copilot for M365 Negotiation Tips.

Microsoft Copilot for M365 (M365 Copilot) is a promising AI tool that Microsoft is rolling out for businesses around the world this year. While it offers extensive generative AI workplace solutions, the potential monthly spend of $30 per month plus more depending on the size of your company and negotiations around Copilot adoption leave some companies at an impasse. Everyone wants to implement M365 Copilot, but a bit of research goes a long way.

Microsoft Copilot is an artificial intelligence tool that enhances productivity in the Microsoft 365 space, which includes Word, Excel, PowerPoint, Outlook, and Teams. This AI assistant works across all M365 applications and services, even extending to Bing and Edge. Copilot utilizes a large language model to help in the creation of different assets, read and summarize emails, create presentations, and more.

All of these functions lead to improved productivity, since Copilot can memorize your tone for emails, summarize a meeting or video for you, remind you about upcoming meetings, and find files you need for a project without much effort on your end. It simplifies the way you approach some of the more mundane aspects of work. If you had to miss a meeting, now you can have Copilot record and summarize it for you. If you need to start up a coding project, it can provide you with simple lines of code to give you more time to focus on more important tasks.

Beyond M365, a Copilot chatbot on Edge and Bing offers tailored responses based on your business. Alongside a partnership with Meta Platforms to make Facebooks AI language model available to Azure software developers, Copilot offers convenience and innovation across your business.

Microsoft is trying to sell you a product or service all the time. They offer so many beneficial solutions for businesses that it’s hard not to use some part of their service model. However, their negotiation strategy preys on insecurity and lack of understanding. If, for example, you don’t have a complete understanding of the support model they offer, you may end up signing a support deal that is disadvantageous to your company. Whether that be cost increases over the lifetime of the contract, or suboptimal support with no recourse, there are plenty of ways Microsoft can use a business’s lack of preparation or insight to their advantage. Unfortunately, Copilot is no exception.

Being the new service on the block means businesses need to research into what Copilot offers, how it would affect their operations, and if the cost is worth the results. Many businesses feel a sense of urgency to integrate Copilot with their current solutions, while Microsoft pushes them to sign new M365 Copilot licenses. While this is something these companies want, sourcing and procurement teams should evaluate the risks and opportunities associated with this new offering on top of researching price, security, and potential leverage loss on future contract renewals.

Contract terms are exceedingly important, especially with a new service on offer. While renewing your contract, insist on the Microsoft Business and Services Agreement (MBSA) and EA structure. If you have already negotiated amendments at an MBSA or EA level, make sure to purchase M365 Copilot under the same framework if possible. This way, those terms that have already been adjusted apply to your new investment. If you negotiate through a Microsoft Customer Agreement (MCA), this will be outside your MBSA/EA, meaning amendments will be limited. If you already have EAP licenses under your MCA channel, try to get your GA licenses transferred to your MBSA/EA contract.

Make sure you confirm with Microsoft how your data will be treated. Microsoft is required to guarantee that none of your organization’s data is stored or housed outside of your own environment. Any user identities, prompts, responses, application details, or data falls under this umbrella. M365 Copilot offers potential security concerns for some companies, but keeping Microsoft honest on where your data is housed and how it can be used will go a long way in keeping you safe.

While you’re at it, review any language in the contract around data residency and sovereignty. Microsoft states that “data may be stored and processed outside of its tenant’s geographic region, unless service specific terms or product documentation for a given Microsoft Generative AI Service states otherwise.” Microsoft is compliant with its commitments under Microsoft EU Data Boundary, but clients should still ensure that everything is legal and housed exactly where they expect it.

Microsoft is notorious when it comes to sales tactics, especially now that many contracts are trying to force the inclusion of M365 Copilot into the EA renewals with improved discounts. If you find that Copilot offers a great deal of value to your organization, try to synchronize any investments into your EA renewals. This maximizes your leverage moving forward as M365 Copilot will be part of user costs in Unified Support. Don’t negotiate in a silo. Part of your negotiation process should include checking from concessions on the pricing prerequisite M365 E3 and E5 licenses.

Seek out discounts wherever possible. As with previous sales priorities from Microsoft, the introduction of M365 Copilot may come with discounts between 10-40% based on size, scope, and publicity. Microsoft is not offering discounts to everyone. In fact, the lowest tier price band stands as is, while the higher price bands will need to pursue negotiations. Make sure your true-up prices are discounted in the same percentage.

While Copilot may see price reductions in the future, there is a degree of need from some companies to onboard Copilot as soon as possible. If waiting is out of the question, then make sure you have full overview of the long-term investment you are making into M365 Copilot, as future renewals may come with a significant price increase. This is especially true for Microsoft support renewals, as Copilot is considered an element of these deals moving forward, which will naturally increase the base price. To reduce support spending and free up more capital for technological ventures, a third-party support alternative may be your best option.