by Wyn Hopkins

How many ‘Copilots’ is Microsoft actually selling you?

In summary

Microsoft has a range of products called “Copilot”: This post is focussing on the most common for business users: Copilot Chat (free) and the Paid Add-on, Microsoft 365 Copilot
There’s also a Microsoft 365 Copilot Business but it is essentially the same as Microsoft 365 Copilot, it’s just priced for organisations under 300 seats.
Confusingly you may be able to get Copilot Chat to edit a Word or Excel file without any paid add-on. The add-on buys organisation priority access, and agents, plus “grounding” in your organisations data (i.e. access to your files and folders and emails etc known as “Work IQ ).
Copilot Studio and Copilot Cowork sit outside all of that again, billed separately in Copilot Credits. Cowork is always metered, on every task, however light. Some Copilot Studio capability is covered by a 365 Copilot
Copilot for Power BI is something completely different and requires Microsoft Fabric Capacity

Two naming traps before we start

First, “Copilot Chat” and “Microsoft 365 Copilot” sound almost the same. They’re not. One is free and pulls from the web. The other is a paid add-on grounded in your own organisation’s data.

Second, “Microsoft 365 Copilot Business” sounds like a cut-down version of “Microsoft 365 Copilot”. It isn’t. Per Microsoft’s own FAQ, it has the same capabilities, just a different price and a 300-seat eligibility cap. You lose nothing by choosing Business.

Copilot Chat (free with a Microsoft 365 licence)

If you’re on a standard Microsoft 365 plan, Copilot Chat is already switched on, free. It answers from the web, and can work with a document, email, or spreadsheet you have open in select apps. It won’t search your other files, emails, or meetings unless you upload or paste them in.

Microsoft 365 Copilot

AUD $44.90 per month for those with Enterprise 365 licences. This is the one people mean when they say “we bought Copilot.” On top of Copilot Chat, it’s grounded in your organisation’s own emails, meetings, and files ( this is referred to as Work IQ), edits documents and spreadsheets directly rather than just discussing them, and adds agents, Copilot Analytics, and other admin controls. It gives priority access to running tasks against files over those on the Free tier.

Microsoft 365 Copilot Business

For businesses with 300 people or fewer on Business Basic, Standard, or Premium. Microsoft’s own FAQ says it delivers the same capabilities as the Enterprise Microsoft 365 Copilot add-on, just priced for smaller organisations.

Worth checking before you buy it separately: Business Premium alone is AU$32.90 per user per month, and the Copilot Business add-on is currently AU$26.91, so buying both as separate line items costs AU$59.81. The bundled plan, Microsoft 365 Business Premium with Copilot, is AU$47.90, about AU$12 cheaper per user per month. Note that the AU$26.91 add-on price is a promotional

The bit that causes the confusion: what Copilot can do inside Word, Excel, PowerPoint, and OneNote

A large share of people already have some ability to get Copilot to edit a spreadsheet for them, without their organisation ever buying the add-on.

Sign in and Microsoft shows you one of three labels: Copilot Chat (Basic) no editing – certain basic office plans, M365 Copilot (Basic) no paid add on, or M365 Copilot (Premium). It’s tempting to assume only the Premium label can edit your file for you. That’s not quite right.

What the paid add-on changes is the quality of service, not a simple on/off switch. Without the add-on, you get “standard access”: subject to service capacity, and can be slower or more limited at busy times of day, particularly for things like file upload and image generation. With the add-on, you get “priority access”: faster, more consistent performance, and voice features are add-on only. Microsoft hasn’t published a specific number of prompts or edits allowed per day for either tier, so anyone quoting you an exact daily limit is guessing.

One more wrinkle: your own IT department can tighten this further at a tenant level, regardless of Microsoft’s default. So two people at two different companies, both without the paid add-on, can still have genuinely different experiences depending on how their own admin has configured things.

Two more you’ll hear about: Copilot Studio and Copilot Cowork

Both sit outside the plans above, and both are billed separately ( sort of ).

Copilot Studio is Microsoft’s platform for building custom AI agents. If you already have the Microsoft 365 Copilot add-on, building and running simple internal agents is included. Publishing an agent externally, opening it up to staff without a Copilot licence, or running it at real scale needs its own consumption-based licence at USD $0.01 per credit – the huge question being how many credits does a prompt use??

Copilot Cowork, now generally available, goes a step further again: an agent layer that takes on multi-step work, research, analysis, pulling a report together from across your files, and hands back a finished result rather than a chat answer. It requires the Microsoft 365 Copilot user licence as a base, then meters the agent work itself through the same credit system.

Cowork turns part of your Copilot spend from a predictable per-seat licence into a variable, usage-based one, and it’s worth understanding before it’s switched on for your team. Type /Cost after running a prompt to see how many credits it used.

The takeaway

It’s confusing.
365 Copilot is the fixed fee paid tier that gives the best functionality inside Excel and other applications coupled with access to other documents in your company’s tenant. It also gives the ability to build and save prompts (agents).
Cowork is more advanced longer running scenarios and always uses Credits.
How Many Credits? Only testing will answer that, you can type /cost after running a prompt to see. Fairly simple things in my view can easily use $2 – $5 of credits.

Copilot Studio can be used to build more complex agents for the organization, the standard 365 Copilot access does open up Copilot Studio for some basic scenarios and for those run by other 365 Copilot licence holders but then you have to move to Credits for more advanced capabilities and for non 365 Copilot user access.