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December 4, 2023

Sly Change in M365 Copilot - December 2023 Microsoft Licensing Update

SAMexpert Podcast

The December 2023 update of Microsoft licensing reveals a quiet yet significant change: the removal of Copilot eligibility from certain Microsoft 365 plans, particularly impacting small and medium businesses.

This move raises critical questions about 'AI inequality' in the tech industry.

In other updates:

  • M365 Copilot renamed,

  • An AI-powered video editor added to Microsoft 365.

6.47 MB
Episode Transcript

When you least expect it, Microsoft delivers. Forgive my sarcastic tone today. An unexpected development compelled me to go live, skipping our usual Wednesday schedule. Today, when I looked into the latest Microsoft licensing updates, there wasn't much that caught my eye.

The only exception is the commercialisation of Clipchamp – a recent acquisition by Microsoft. This video editing tool is now included as Clipchamp Standard in the E3, E5, Business Standard, and Business Premium Microsoft 365 plans. For those interested in the premium version, it's available as an add-on at an additional cost.

I couldn't help but think, "Is that all?" It's another AI-powered video editor. While this might be significant news for some, I don't think it is "breakingly" newsworthy. But luckily, it was not the highlight of today's developments.

While contemplating the lack of fun, I stumbled upon a LinkedIn post by Didactive Education, known for its work in Microsoft Licensing training. They meticulously scrutinised the December update line by line.

And this is what they found. Among the quiet, unannounced changes, two stood out.

Firstly, a cosmetic change: Microsoft 365 Copilot has been renamed to Microsoft Copilot for Microsoft 365. It is a simple renaming, a purely marketing move.

But the more intriguing and quite sly move was the removal of Microsoft Copilot eligibility from Microsoft Business plans. Now, only E3 and E5 plans are eligible.

Why this shift? The community suspects it's tied to the licensing constraints. Microsoft 365 Business plans, though initially marked as eligible, were only viable for Copilot if you maxed out the allowed license count, which stands at 300. This figure also happens to be the minimum Microsoft stipulates for Copilot investment. Essentially, the upper limit for Business plans is the lower limit for Copilot, a curious coincidence.

Furthermore, Copilot remains unavailable in CSP, with the only alternative being the MCA-E, the Microsoft Customer Agreement for Enterprise, helmed by a team focused on larger enterprises, not those with a mere 300 licenses.

I believe Microsoft is within its rights to make these changes – it is their product, after all. But the lack of transparency is puzzling. Why implement such changes so discreetly? Consider the Microsoft blog comment section, where the announcement of Copilot's availability was met with a wave of discontent from small businesses. Many expressed frustration and anger over what they perceive as AI inequality. It was already a concerning trend. Now this.

There are theories about Microsoft's motives. Some speculate capacity issues – a plausible, non-malicious reason, considering the intensive resource demands of AI technologies. That could be the crux of the issue.

Another plausible theory I've mentioned in past sessions and videos is the data requirement for the AI model. It may be due to Microsoft's policy of not incorporating individual business data into the global model. Here is how it works, according to Microsoft. In addition to the global AI model, each business that uses Copilot has a local knowledge base, an extension of the model, trained internally and securely. Perhaps the volume of data in smaller organisations is simply too low to train an efficient local model. It could be part of the explanation, though official statements are lacking.

To reflect these updates and their effect on Microsoft-related IT budgets, we've updated the Copilot article on our website, The piece dives into all aspects of Copilot licensing, potential returns on investment, and the feasibility of obtaining discounts.

Speaking of discounts, even large enterprises currently face challenges securing discounts from Microsoft on Copilot. Indirect discount requests may have some traction, but direct discounts are a tough sell.

The pricing is fixed at $30 or £25 per user, with no wiggle room for discounts – programmatic, through Enterprise Agreements, or based on volume. It is just what it is, with a minimum of 300 users.

Again, could Microsoft do that? Yes, undoubtedly.

Why hide it? That's the question.

I'll leave you with that thought.

Have a wonderful day, keep smiling, and goodbye.