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Microsoft 365 Copilot Requirements Unveiled

Microsoft this month described early software licensing requirements for its emerging Microsoft 365 Copilot product.

Microsoft 365 Copilot is an artificial intelligence (AI) tool that's currently at the limited private preview stage (invite only). Microsoft's requirements descriptions are still rather murky, likely because Microsoft 365 Copilot hasn't been released yet as a production-ready product. However, when it does get commercially released, it's looking like it won't be a free addition, even for top-of-the-line Microsoft 365 E5 licensees.

In essence, Microsoft will require organizations to be licensed for certain Microsoft software products, which will give them the option to buy access to Microsoft 365 Copilot via add-on licensing. That notion was echoed by former Microsoft employee Stephen L. Rose, in this June 22 Twitter post.

The software requirements are described in two announcements, a June 21 announcement and a June 23 Microsoft Mechanics announcement aimed at IT pros. Software requirements also can be found in this Microsoft Learn document, dated June 21, which contained a caveat indicating that it "only applies to the Microsoft 365 Copilot Early Access Program, an invite-only paid preview program for commercial customers."

Information Governance
Microsoft 365 services typically are supported by Microsoft Graph information. The Graph tracks organizational content and personnel relationship information, based on IT permission settings. Microsoft 365 Copilot will simply function in accordance with such permissioned scenarios, the June 21 announcement argued:

Copilot experiences use the organizational content in your Microsoft 365 tenant, including users' calendars, emails, chats, documents, meetings, contacts, and more -- all from within the Microsoft 365 compliance boundary. Copilot does not use customer data or user prompts to train the foundation.

However, organizations may have permitted the "oversharing" of information, which is why Microsoft's announcements suggested that organizations will need to prepare to use Microsoft 365 Copilot, mostly by using Microsoft's governance tools. Microsoft's software requirements for Microsoft 365 Copilot included the use some of those tools; other tools may be optional, but were recommended.

Microsoft 365 Copilot directs user "prompts" through the Azure OpenAI service. The Azure OpenAI service is based on the OpenAI company's models, but Microsoft 365 Copilot prompts "do not use OpenAI's publicly available services," Microsoft clarified in its June 21 announcement. Such clarification is needed due to past reports of inadvertent data exposure, such as Samsung employees reportedly disclosing source code when directly using OpenAI's models.

Microsoft 365 Copilot Software Requirements
Organizations will need to have Microsoft 365 E3 or E5 licensing to use Microsoft 365 Copilot, when it's commercially released. Also listed as a requirement was having a Microsoft 365 Apps for enterprise subscription.

Office 365 subscribers and Office perpetual-license users were not mentioned, so presumably these licensees will not be eligible to use Microsoft 365 Copilot. Microsoft's June 21 announcement did carve out an exception for Microsoft 365 Business users, as stated in Footnote 1, which reads, "for small and medium business (SMB) customers, Microsoft 365 Business Standard or Business Premium will be eligible base licenses."

Footnote 1 is a bit peculiar because Microsoft 365 Business Standard and Premium products are deemed by Microsoft to be separate products from the required Microsoft 365 Apps for enterprise products. The notion that those two Business products qualify as base licenses for Microsoft 365 Copilot likely means that Microsoft will sell Copilot to such licensees via an "add-on" license. If that's so, though, it wasn't stated.

I was unsuccessful in getting clarification from Microsoft, as were others, on how the Business products could serve as base products for using Microsoft 365 Copilot.  However, earlier this month, veteran Microsoft journalist Mary Jo Foley stated she got Microsoft's confirmation that even Microsoft 365 E3 and E5 subscribers will have to pay extra to get Microsoft 365 Copilot via add-on licenses.

"Officials have said only that Microsoft 365 Copilot will be a paid add-on to Microsoft 365 E3/E5 and likely to be released via a model similar to GitHub Copilot," Foley wrote in this June 15 Directions on Microsoft article.

In a nutshell, the following software licensing will be required for organizations to use Microsoft 365 Copilot:

  • Microsoft 365 Apps for enterprise, currently priced at $12 per user per month. Microsoft will require organizations using Microsoft 365 Apps for enterprise to be using the "Current Channel or Monthly Enterprise Channel" for getting software updates (no semiannual channel).
  • An Azure Active Directory-based account.
  • Accounts for OneDrive, Outlook for Windows, Microsoft Teams (desktop or Web client) and Microsoft Loop.

Of the required apps, only Microsoft Loop wasn't listed as being included as part of Microsoft 365 Apps for enterprise, per Microsoft's product landing page.

The Microsoft Mechanics video offered a dead link (at press time) of aka.ms/365CopilotPreReqs to get a list of Microsoft 365 Copilot requirements. It also stipulated that organizations would need the Semantic Index for Copilot, as described in this Microsoft video. Semantic Index for Copilot was described as a new enterprise search capability for Microsoft 365 E3 and E5 subscribers that maps an organization's user and company data, per this May 9 announcement.

It's not clear if Semantic Index for Copilot will be included in Microsoft 365 E3 and E5 subscriptions or offered at additional cost. It's also not clear if Semantic Index will be a requirement to use Microsoft 365 Copilot. However, Microsoft's June 21 announcement indicated that Microsoft 365 Copilot users will "get the best results" when company data is indexed by user "work context and preferences" using the Semantic Index.

Organizations also will need to ensure that Microsoft Teams plug-ins are enabled and that WebSockets are "unblocked from user endpoints."

Other Software Requirements?
The Microsoft Mechanics post heavily suggested that organizations will need to get data governance controls in place first before using Microsoft 365 Copilot. It noted that employees "may have too much access to sensitive information."

Microsoft Purview Information Protection use was recommended for overseeing data classifications in organizations, although it wasn't described as being a software requirement. Also recommended, but not stated as required, was the use of Microsoft Syntex for discovery purposes to control data oversharing.

Microsoft is planning to respect the European Union Data Boundary rules on regional data access with Microsoft 365 Copilot use. It will happen "starting in July" for Early Access Program users of Microsoft 365 Copilot, Microsoft indicated.

For organizations with more questions about Microsoft 365 Copilot, an "Ask Microsoft Anything" Q&A text chat session is planned for Thursday, July 13 at 9:00 a.m. Pacific Time. The link to join the Q&A wasn't specified but possibly it'll be held at this Microsoft Tech Community space.

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