Microsoft Solution Providers Weigh In On M365 Copilot Price Tag

‘Thirty dollars per person could be a bargain depending on what they are able to achieve,’ Perry Thompson of Core BTS tells CRN.

While some Microsoft solution providers see no issue selling customers on a planned $30 per user per month Microsoft 365 Copilot, others say the vendor needs to better justify the generative artificial intelligence tool’s price tag.

Even before the Redmond, Wash.-based vendor has disclosed a date for when M365 Copilot becomes generally available, some solution providers have started building generative AI practices that promise to increase productivity and save users time through content generation.

“If the strategic digital goal of the company is to increase efficiency, grow the business, improve customer satisfaction while reducing cost across many workloads in their enterprise, then $30 per person could be a bargain depending on what they are able to achieve,” Perry Thompson, managing director of technology strategy at Indianapolis-based Microsoft solution provider Core BTS, told CRN in an interview.

Microsoft Solution Providers On M365 Copilot

Core BTS is a member of CRN’s 2023 Managed Service Provider 500.

Other solution providers told CRN that partners and Microsoft need to lay out well-structured business cases to motivate executives into investing in M365 Copilot once it’s available, Vineet Arora, chief technology officer of Santa Clara, Calif.-based Microsoft partner WinWire Technologies told CRN in an interview.

WinWire is No. 233 on CRN’s 2023 Solution Provider 500.

“I do feel that $30 per user per month is a little bit on the higher side given that this price will be 80 percent of what an E3 (license costs) and over 50 percent for E5 per user cost,” Arora said. “Emphasizing the robustness of this Copilot technology and offering a phased implementation plan and some sort of try-before-you-buy commit can also help gain CXOs’ trust for this additional investment. All these approaches can then potentially justify the $30 price tag – else it may even hamper adoption of a GenAI feature that I also believe has tremendous potential.”

The $30 per user per month price tag for M365 Copilot is on top of existing M365 payment plans. A recent report from financial services firm Bernstein said that the price uplift ranges from 53 percent to 240 percent. M365 E3 is $36 per user, per month. M365 E5 is $57. M365 Business Standard is $12.50. And Business Premium is $22.

While M365 Copilot’s GA date isn’t yet known, some generative AI offerings such as Microsoft Sales Copilot and Azure OpenAI Service are GA. Other tools such as Bing Chat Enterprise are in preview.

A recent report from Morgan Stanley speculated that M365 Copilot could go GA in spring 2024.

Until users gain more access to generative AI tools, the channel and other investors are left to guess on the ultimate value of these offerings.

Earlier this month, Microsoft CEO Satya Nadella called next-generation AI a partner ecosystem opportunity that could span $4 trillion to $6.5 trillion.

And on this month’s quarterly earnings call from Microsoft, Chief Financial Officer Amy Hood said that the time needed to move copilots through preview and GA, to give them prices and sell them means no meaningful revenue until the second half of Microsoft’s 2024 fiscal year – in the winter.

“Even with strong demand and a leadership position, growth from our AI services will be gradual as Azure AI scales and our Copilots reach general availability dates. … I do think this is really about pacing,” Hood said.

A Morgan Stanley survey suggested “broad initial interest in Generative AI, but little near-term budget impact,” according to a recent report.

Here’s what else solution providers told CRN.

Perry Thompson

Managing Director, Technology Strategy

Core BTS

Indianapolis

The term fair price can be associated with the strategic goals of a company. If the strategic digital goal of the company is to increase efficiency, grow the business, improve customer satisfaction while reducing cost across many workloads in their enterprise, then $30 per person could be a bargain depending on what they are able to achieve.

Ultimately, fair pricing comes down to the client to be able to measure the impact of AI in their organization to be able to justify its cost and make sure they are getting their return on investment.

This is the principle of Core BTS AI Readiness Assessment – to help our clients identify areas of benefits of AI within their organization that will have a high impact and help them understand the impact and potential cost savings.

Vineet Arora

CTO

WinWire Technologies

Santa Clara, Calif.

I do feel that $30 per user per month is a little bit on the higher side given that this price will be 80 percent of what an E3 (license costs) and over 50 percent for E5 per user cost.

Based on my observations of the demos and online articles, the M365 Copilot shows great promise in terms of productivity gains for information workers. But convincing CXOs to invest in a technology that hasn’t been proven with end users can be challenging in the early days. To address this, a well-structured business case is needed.

It should highlight the benefits of the Copilot, such as improved productivity and collaboration, and include real-world examples of successful implementations. Emphasizing the robustness of this Copilot technology and offering a phased implementation plan and some sort of try-before-you-buy commit can also help gain CXOs’ trust for this additional investment.

All these approaches can then potentially justify the $30 price tag – else it may even hamper adoption of a GenAI feature that I also believe has tremendous potential.

Dawn Sizer

CEO

3rd Element Consulting

Mechanicsburg, Pa.

As far as pricing on it, I don’t think they’re out of the range of what they should be.

Like, I know everybody thinks, ‘Well, that doubles the price of the license.’

But the flip side to that is, how much are you worth at any point in time? … And I’ve looked at … the Loop tools that Microsoft has … if you start looking at that as, if I join these couple things together, now all of a sudden, I have a full document that didn’t take me four hours to write.

How much is my time actually worse? … I look at it from that standpoint. If it saves me a couple of hours, I’m all about it. If I get into it, realize that it’s going to take me a long time to train it, then that’s a whole different scenario. And we can just turn that right back off. … If we’re able to show them (customers) value or show them an outcome – this is the value proposition and then here’s the outcome that you can expect from that value proposition. That’s it. That’s a conversation that you can have.

If the value prop isn’t really there because the training on it is extensive, then not only are they not going to see a value proposition, but they’re not going to see a real outcome either. So how do you justify that?

## Mike Wilson

CTO, Partner

Interlink Cloud Advisors

Mason, Ohio

(I think) $30 per user per month is really cheap compared to the value provided.

If I can have Copilot attend a meeting that I just needed to be informed of the outcome, that’s a huge win.

The challenge is that for some organizations, this will be a big up front cost, but the value isn’t necessarily realized right away. Yes, I make my info workers more productive, but I still have to figure out what they do with that extra time.

I don’t think there’s going to be an O365 Copilot. The M requirement is due to it enabling the Semantic Index which Copilot uses to understand relationships between people and content on the tenant.

Zac Paulson

Director, Product And Strategy

ABM Technology Group

Fargo, N.D.

It sounds expensive at $30, but that’s likely because we are used to so much value for our $12 or $20 from our M365 subscription.

In reality, we are really getting some pretty advanced tech for $30 on Copilot.

I think it’s worth it, but maybe not something you buy for everyone in the company.

Phil Walker

CEO

Network Solutions Provider

Manhattan Beach, Calif.

It may add value, but (it’s) hard to tell right now.

They need to sell us better on why we are paying $30 extra.

Gordon McKenna

Global Vice President, Alliances

Ensono

Downers Grove, Ill.-based

If it delivers the productivity benefits it is promising – and the demos are showing (this) – then yes, it will be worth every cent.

This will be a game changer for most businesses and at a time when many are letting go of staff and are wanting their remaining people to do more with less.

(I think that) $30 per seat may look like a bargain in 12 months’ time if the organization gets to grips with it quickly.

I also believe it will spark a new partner ecosystem into life, making business productivity add-ons that will both compliment and maybe even compete with Microsoft. It will be interesting to see how that plays out.