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Industry InsightsMarch 25, 2026Updated April 16, 2026 · v614 min read

Understanding Microsoft 365 Copilot2026 Licensing Reference · Wave 3

What's included at each tier, how E3 and E5 affect your options, what Wave 3 adds — and how Claude fits into the platform.

MK

Mathieu Kessler

Founder, Kesslernity

Sources: Microsoft Learn · Anthropic

K
KesslernityResearch

Executive Snapshot · Read this first

Five rules that cover 90% of M365 Copilot decisions

Skip to 1-minute takeaway
💬

Copilot Chat (Basic) = free — no longer inside Office apps for large orgs (April 15)

As of April 15, 2026: for tenants with 2,000+ users, removed from Word, Excel, PowerPoint, and OneNote. Outlook grounding stays. No Microsoft Graph access. Small tenants (<2,000 users) get throttled "Standard Access" with upsell prompts.

💼

M365 Copilot (Premium) = $18/user (promo through Jun 30, 2026; $30 list from Jul 1), full Graph access

Reads your org's emails, meetings, SharePoint, Teams. In-app in Word, Excel, Outlook, Teams.

⚖️

E3 vs E5 = same AI, different compliance

The Copilot add-on costs $30 on both. E5 adds Insider Risk, Advanced eDiscovery, Information Barriers.

🧮

E7 becomes the better deal from July 1, 2026

At promo pricing, E5+Copilot+Agent 365 = ~$90 (cheaper than E7 at $99). At list price from July 1: ~$112 vs E7 $99 — E7 saves $13 and adds Entra Suite.

🤖

Claude is inside paid Copilot — not alongside it

Claude Sonnet 4.6 and Opus 4.6 are model options in Copilot Chat, Excel Agent Mode, Researcher, and Copilot Studio. Requires M365 Copilot licence + Frontier program access. Free Copilot Chat uses the default model only.

Two tiers, one platform

Microsoft offers two enterprise AI experiences within the M365 ecosystem. Understanding the boundary between them is the starting point for any Copilot adoption decision.

Yes, Claude is inside Copilot — but only with a paid M365 Copilot licence. Free Copilot Chat users stay on the default model. See Section 06 →

Free · IncludedChanged April 15, 2026

Copilot Chat (Basic)

AI chat grounded in the public web, with enterprise data protection. Automatically available to any M365 business subscriber. No Microsoft Graph access — it cannot see your organisation's emails, documents, or Teams conversations unless you paste them in manually.

Behaviour change — effective April 15, 2026

Tenants with 2,000+ users: Copilot Chat (Basic) removed from Word, Excel, PowerPoint, and OneNote (no button, no panel). Access remains in Outlook (email + calendar grounding) and the M365 app/web.

Tenants with fewer than 2,000 users: Copilot Chat (Basic) stays in Office apps but is downgraded to “Standard Access” (capacity-limited responses) with in-product upsell prompts to upgrade to Premium.

Included with eligible M365 subscription

Source: MC1253858 (>2,000-user tenants) · MC1253863 (<2,000-user tenants) — both published March 17, 2026

Paid Add-on · Enterprise

M365 Copilot (Premium)

Full AI integration embedded across Word, Excel, PowerPoint, Outlook, and Teams. Grounded in Microsoft GraphiMicrosoft Graph is the unified data layer connecting all M365 services — emails, SharePoint docs, Teams chats, calendars, and more. Copilot uses it to reason across your actual work data. — it understands your org's emails, documents, meetings, and calendar. Paid add-on on top of your existing M365 plan.

$18 / user / month · Enterprise and qualifying Business plans · Promotional price through June 30, 2026 (list: $30)

What each tier includes

A full breakdown across cost, AI capabilities, in-app integration, security, and governance.

Key concepts

🕸️

Key concept

What is Microsoft Graph?

Microsoft Graph is the unified data layer that connects all Microsoft 365 services. Think of it as the nervous system behind your Microsoft tenant — it provides a single API endpoint that gives authorised applications access to data across Outlook emails, SharePoint documents, OneDrive files, Teams conversations, calendar events, meetings, and user profiles.

When M365 Copilot is described as “grounded in Microsoft Graph,” it means Copilot can read and reason across your actual work data — not just the public internet. It knows that Sarah sent you a document last Tuesday, that you have a budget review meeting tomorrow, and that the Q2 report is stored on SharePoint. Crucially, it only surfaces data the signed-in user already has permission to access — it does not override your existing security policies.

Emails & calendarSharePoint & OneDriveTeams messagesPermission-aware — reads only what you can access
🚀

Key concept

What is the Microsoft 365 Frontier Program?

The Frontier Program is Microsoft's early-access tier for M365 Copilot, available to organisations with a standard M365 Copilot licence. It gives access to the latest capabilities before they roll out broadly — including new model options (like Claude), advanced agentic features, and preview integrations.

Features in the Frontier program are production-ready but not yet generally available. They are rolling out progressively and may have regional or admin prerequisites. Examples currently behind the Frontier gate: Claude model switching in Copilot Chat, the Researcher and Analyst agents, advanced Copilot Notebooks features (SharePoint folder sync, Word/PPT export, mind maps), and Copilot Cowork. Note: Excel Agent Mode itself is GA — it is the Claude model picker within it that requires Anthropic to be enabled by an admin. Admins can enrol for Frontier through the M365 Admin Center.

Requires: M365 Copilot licenceOpt-in via M365 Admin CenterProduction-ready, early access
🧠

Key concept

What is Work IQ?

Work IQ is the intelligence layer inside M365 Copilot and Agent 365 that grounds AI in real-time, shared organisational context. It has three tightly integrated layers:

Data — unifies signals from files, emails, meetings, chats, and business systems across M365 to capture how work happens across the organisation.
Memory — builds persistent understanding of how people and teams work, so agents stay aligned to priorities and remain consistent across tasks, apps, and sessions.
Inference — brings together models, skills, and tools (via Work IQ MCP servers) so agents can reason and take action, with the Agent 365 control plane ensuring all actions remain observable, governed, and compliant.

Work IQ also exposes a catalog of MCP servers (Work IQ Mail, Calendar, Teams, SharePoint, OneDrive, Word, User) and a MCP Management Server to build custom servers with 1,500+ connectors. Available through Agent 365 add-on ($15/user/month, GA May 1, 2026). Work IQ MCP features are currently in preview.

Requires: Agent 365 ($15/user/mo)GA May 1, 2026MCP features: Preview
FeatureCopilot Chat (Basic)M365 Copilot (Premium)
💰 Cost & Licensing
Monthly cost per userFree (included)$18/mo promo (through Jun 30, 2026) · $30 list from Jul 1 — Enterprise & Business plans
Required base planMinimum eligibilityAny M365 Business / Enterprise (E1+)E3, E5, Business Std/Premium, Office 365 E1/E3/E5
Works with E3
Works with E5Enhanced Purview compliance inherited✓ + E5 Purview features
Minimum seat requirementNoneNone (removed 2024)
🤖 AI Capabilities
Web-grounded AI chat
Work mode — Microsoft GraphiMicrosoft Graph is Microsoft's unified API connecting all M365 data — emails, docs, meetings, Teams. Copilot uses it to answer questions about your actual org data. accessReads emails, docs, meetings, Teams
Work IQIntelligence layer: Data (unified M365 signals) + Memory (persistent context) + Inference (reasoning & agentic actions)
Researcher & Analyst agentsDeep reasoning (Researcher) & Python data analysis (Analyst) — multi-model: Critique (two-model pipeline, default Auto) or Council (Anthropic + OpenAI in parallel) FrontieriBoth Researcher and Analyst agents are Frontier program features — available to M365 Copilot licensees who have opted into the Frontier program via M365 Admin Center.
Model choice (OpenAI / Claude) FrontieriThe Frontier Program gives M365 Copilot licensees early access to new AI capabilities — like Claude model switching — before they roll out broadly. Opt-in via M365 Admin Center.
Copilot TuningOrg-specific fine-tuning
Image generation (Designer)
Copilot Pages
📱 In-App Integration
Copilot in Word
Copilot in ExcelData analysis, Python, Agent Mode
Copilot in PowerPoint
Copilot in Outlook
Copilot in TeamsMeeting transcription & summary, in-meeting Q&A, chat thread recap
Copilot SearchCross-M365 + 3rd-party semantic search
🔒 Security & Compliance
Enterprise Data Protection (EDP)
Data stays within tenant
No training on your data
Purview / sensitivity label enforcement✓ (full on E5)
SharePoint Advanced Management✓ (included since 2025)
Security Copilot agentsRolling out 2026 · 400 SCUs/month per 1,000 licences · max 10,000 SCUs/month✓ (included in E5, no extra cost)
⚙️ Admin & Governance
IT admin controlsBasicFull controls
Copilot Dashboard (Viva Insights)
Copilot Analytics
Copilot Studio — custom agentsLite agents only✓ Full, included at no extra cost
Agent 365 — MCP infrastructure + Work IQGA May 1, 2026 · $15/user/month add-on · Included in E7 · Work IQ MCP features currently in previewAdd-on ($15/mo)
Pay-as-you-go agents✓ (limited)✓ Full Copilot Studio

What E3 vs E5 changes about Copilot

This is the most commonly misunderstood aspect. The Copilot add-on costs the same on E3 and E5 — it's the compliance posture that changes.

Base plan determines compliance scope — not AI features

E3

Full Copilot feature set — standard security posture

All M365 Copilot capabilities: Work IQ (Data + Memory + Inference intelligence layer), Graph grounding, in-app integration across Word/Excel/PowerPoint/Outlook/Teams, Copilot Studio agents. Frontier features (Researcher, Analyst, model choice) available with Frontier enrolment. Purview features at E3 tier: basic retention policies, standard eDiscovery, sensitivity labels. SharePoint Advanced Management included.

E5

Same Copilot features + elevated compliance coverage

Identical Copilot AI capabilities as E3. Additionally, Copilot inherits E5's Purview capabilities: Insider Risk Management, Advanced eDiscovery (Premium), Information Barriers, Communication Compliance, and full sensitivity label enforcement within Copilot responses. Copilot still costs $18/user/month (promo through June 30, 2026; $30 list from July 1) as a separate add-on.

Rule

Key principle: Copilot inherits the compliance posture of the base plan

The Copilot license does not change your compliance posture — your base M365 plan does. Upgrading from E3 to E5 for better governance is a separate budget decision from purchasing the Copilot add-on. Both decisions are independent.

Common Misconception #1

"We have E5 so we already have Copilot"

Incorrect. E5 includes advanced security and compliance tools, but M365 Copilot is always a separate paid add-on regardless of base plan tier. You must purchase the add-on explicitly ($18/user/month promo through June 30, 2026; $30 list from July 1).

Common Misconception #2

"Copilot Chat has weaker privacy"

Incorrect. Copilot Chat has full Enterprise Data Protection — it is not the consumer Copilot. Your prompts do not train models and data stays in your tenant. The limitation is functionality, not security.

Common Misconception #3

"You need 300+ seats to buy Copilot"

No longer true. Microsoft removed the minimum seat requirement in 2024. You can license a single user. Business plan SKUs are available for organisations under 300 users.

Important: True Cost

The $30 is never the total number

The Copilot add-on sits on top of your base plan. Today (promo through Jun 30): E3 (~$36) + Copilot ($18) = ~$54/user/month. E5 (~$57) + Copilot ($18) = ~$75/user/month. Add Agent 365 and you reach ~$90 — at promo price, the bundle is cheaper than E7 at $99.

From July 1, 2026: E3 rises to ~$46, E5 to ~$67, Copilot list price reverts to $30. The stacks become ~$76 (E3+Copilot), ~$97 (E5+Copilot), and ~$112 (E5+Copilot+Agent 365). E7 at $99 then saves $13/user/month — plus Entra Suite is included. Build the full post-July stack before presenting a renewal budget.

Cost ladder — approximate monthly per-user price (promo pricing through June 30, 2026)

$0
Copilot Chat free · web-only · no Graph
$54
E3 ($36) + Copilot ($18 promo)

Full AI feature set. No advanced compliance.

$75
E5 ($57) + Copilot ($18 promo)

Same AI as E3. Adds Insider Risk, Advanced eDiscovery, Information Barriers.

$90
E5 ($57) + Copilot ($18 promo) + Agent 365 ($15) from May 1, 2026

At promo price, bundle is cheaper than E7. From July 1 at list price ($112), E7 wins.

$99
M365 E7 — all-in bundle ✓ GA May 1, 2026 · saves $13 vs bundle after July 1 list price

E5 + Copilot + Agent 365 + Entra Suite. Arithmetic winner from July 1 when Copilot list price reverts to $30.

Full cost stack — approximate monthly list price per user

Two states shown: current prices and post-July 2026 after E3/E5 base plan increases take effect.

Show pricing:
Copilot $18 promo
PlanThrough Jun 30, 2026Note
Copilot ChatWeb-only, no Graph access$0
M365 E3 + CopilotFull in-app AI, Graph access~$54 /user/moE3 rises ~$36→~$46 Jul 1
M365 E5 + CopilotE3 + advanced compliance~$75 /user/moE5 rises ~$57→~$67 Jul 1
E5 + Copilot + Agent 365Full agentic stack~$90 /user/moAgent 365 $15 unchanged
M365 E7Includes Copilot + Agent 365 + Entra Suite$99 /user/moE7 saves $13/user vs bundle from Jul 1

Copilot add-on at $18/user/mo promo price. E3/E5 base plan increases on Jul 1, 2026 are already excluded — promo applies to Copilot only.

Two new SKUs — GA May 1, 2026

Microsoft Wave 3 (March 9, 2026) introduced Agent 365 and M365 E7. Both are designed to remove the main blockers to broad Copilot and agent deployment at scale. Source: Microsoft 365 Blog, March 9, 2026 · M365 Licensing News

Agent 365 and M365 E7 — what they are and who they're for

E7

M365 E7 — $99/user/month · All-in bundle

A new top-tier SKU that bundles M365 E5 + M365 Copilot + Agent 365 + Microsoft Entra Suite into a single licence. Designed for organisations that want enterprise AI, advanced security, identity governance, and agent management without managing separate add-ons. For large orgs already on E5 who were adding Copilot separately ($36 + $30 = $66), E7 at $99 adds Agent 365 and Entra Suite for $33 more.

A365

Agent 365 — $15/user/month · Standalone or included in E7 · GA May 1, 2026

Agent 365 is the MCP infrastructure and intelligence platform for M365 Copilot agents. It is built around Work IQ — a 3-layer intelligence system (Data: unified M365 signals; Memory: persistent context across sessions; Inference: reasoning and agentic actions) that grounds agents in real-time organisational context. It includes a curated catalog of Work IQ MCP servers — pre-certified, enterprise-ready tools for Outlook, Calendar, Teams, SharePoint, OneDrive, Word, user profiles, and Dataverse/Dynamics 365 — plus a MCP Management Server to build custom MCP servers with 1,500+ connectors (ServiceNow, JIRA, Graph APIs, REST endpoints). Governance: Admins manage all MCP servers centrally from M365 Admin Center — allow or block per server, scope permissions per agent. Every tool call is observable via Microsoft Defender Advanced Hunting. Developer tools: Copilot Studio (low-code), Azure AI Foundry (pro-code), VS Code + Agent 365 SDK (direct API). Note: Work IQ MCP features are currently in preview.

Context

Today only ~3% of 450M M365 users have a Copilot licence

E7 removes the "Copilot is a separate procurement decision" friction for large enterprises on E5. Agent 365 directly addresses the IT governance concern that has kept many pilot programmes from scaling. Both are positioned to accelerate the remaining 97%. Source: Microsoft FY2025 earnings + Wave 3 announcement commentary, March 9, 2026.

Which tier fits which situation

Three practical tests. The right answer depends on your permissions posture, user mix, and current licensing. The E7 card is the one most people miss.

Decision flowchart — answer each question in order

1
Does your use case need access to internal data — emails, Teams, SharePoint, calendar?
NO →✓ Copilot Chat (free)Web-grounded, no Graph. Good for drafting, research, pilots.
YES →Continue to step 2
2
Does your organisation require advanced compliance — Insider Risk, Advanced eDiscovery, Information Barriers?
NO →E3 base plan+ Copilot add-on ($18 promo / $30 from Jul 1) = ~$54 now / ~$76 from Jul 1. Full AI feature set.
YES →E5 base plan+ Copilot add-on ($18 promo / $30 from Jul 1) = ~$75 now / ~$97 from Jul 1. Same AI, elevated compliance.
3
Are you on E5 and planning to add both Copilot and Agent 365 governance?
NO →M365 Copilot add-on$18 promo (through Jun 30) / $30 list from Jul 1 — on top of your base plan.
YES →⚡ E7 from July 1$99 all-in vs ~$90 today (bundle cheaper at promo) / ~$112 after Jul 1 (E7 saves $13). Lock in renewal timing.

Copilot Chat — start here when…

  • SharePoint permissions haven't been audited — Graph access exposes every overshared file, not just the ones you intend
  • The use case is drafting or research from pasted or public content, not querying internal org data
  • You need to build the internal ROI case with a named pilot cohort before a per-seat budget is visible to finance
  • Fewer than a third of target users are daily Outlook + Teams + Word users — the rest won't recover the cost (currently $18/month promo, $30 from July 1)

M365 Copilot — buy it when…

  • Users are in Outlook for 2+ hours/day — meeting summaries and email drafting alone typically recover 30–45 min/week per person
  • There are recurring reporting cycles (monthly reports, board packs, project status) that justify Word and Excel integration
  • You need to deploy persistent @mention agents via Copilot Studio — this requires the paid licence
  • SharePoint permissions are clean and you are ready to give AI access to internal documents, emails, and meeting history

E7 or Agent 365 — the maths forces the decision

  • You are on E5 and planning to add Copilot + Agent 365: at the promotional $18 price (through June 30), the bundle costs ~$90/user/month — cheaper than E7 at $99. From July 1, 2026, Copilot reverts to $30 list price and the stack rises to ~$112, making E7 at $99 the arithmetic winner by $13/user/month — plus Entra Suite is included. Lock in renewal timing before July 1 if planning to stay on the bundle; switch to E7 otherwise.
  • IT has blocked broad agent rollout because there is no central visibility into which agents are deployed and what data they access
  • You need per-agent policy controls — data access scope, approval workflows, spend limits — before sign-off beyond a pilot
  • Microsoft Entra Suite (identity lifecycle, verified ID, governance) is already in your identity and access roadmap
Real-world scenarios

Scenario A · Copilot Chat

Marketing team writing campaign briefs

Team needs help drafting content, researching market trends, and refining copy. Work is based on briefs and public information — no need to query internal emails or SharePoint files. SharePoint permissions have not been reviewed.

✓ Copilot Chat — free, no licence needed

Scenario B · M365 Copilot

Finance team building monthly management accounts

Controller spends 6 hours/month pulling data from Outlook, SharePoint, and Excel into a board pack. Needs Copilot to summarise email threads, generate variance commentary from live workbooks, and draft the narrative from prior reports stored on SharePoint.

→ M365 Copilot add-on — $18/user (promo through Jun 30), pays back in week 1

Scenario C · E7 decision

Large enterprise on E5 planning full AI rollout

CIO wants M365 Copilot for 5,000 users, plus Agent 365 to give IT governance visibility over deployed agents. At promo pricing, E5+Copilot+Agent 365 = ~$90/user/month (bundle is cheaper). From July 1, 2026 at list price: ~$112 vs E7 $99 — E7 saves $13 and adds Entra Suite — already in the identity roadmap.

→ E7 from July 1 — $13 saving vs list-price bundle. Lock in renewal timing.

How Claude models appear within M365 Copilot

Anthropic's Claude is not a separate product to Copilot — it is now integrated as a model option within Copilot itself, available across several features from September 2025 onwards.

How it rolled out

September 24, 2025

Microsoft–Anthropic partnership — Claude arrives in Researcher & Copilot Studio

Claude Sonnet 4 and Opus 4 become available inside M365 Copilot. Initially opt-in only under Anthropic's own commercial terms. Available in the Researcher agent and as model options in Copilot Studio. Source: Anthropic × Microsoft partnership announcement

December 8, 2025

Admin toggle released — Anthropic moves to Microsoft subprocessor model

New toggle appears in M365 Admin Center. For most commercial cloud tenants: ON by default. EU / EFTA / UK: OFF by default, admin opt-in required. Government clouds (GCC, GCC High, DoD): not available, no FedRAMP certification. Source: Microsoft Learn — M365 Copilot privacy & data protection

January 7, 2026

Anthropic becomes active Microsoft subprocessor — Agent Mode in Excel enabled

Claude models now covered under Microsoft's Product Terms and DPA. No separate Anthropic agreement needed. Enterprise Data Protection applies. Claude Opus 4.5 becomes available in Agent Mode for Excel on the web. Model switcher appears in Copilot pane. Source: Microsoft Learn — AI providers as subprocessors

March 9, 2026 · Wave 3

Claude in mainline Copilot Chat & Copilot Cowork launches

Claude available in everyday Copilot Chat via the Frontier programiThe Frontier Program is Microsoft's early-access tier for M365 Copilot — production-ready features rolling out progressively to opted-in tenants.. Copilot Cowork launches — a cloud-based multi-step agentic layer built on Anthropic's Claude, running inside M365's security and governance framework. Source: Microsoft 365 Blog — Wave 3, March 9, 2026

Where Claude appears in Copilot today
Copilot Chat

Model switcher — OpenAI or Claude

Via the Frontier programiThe Frontier Program gives M365 Copilot licensees early access to new AI capabilities before general availability. Requires opt-in via M365 Admin Center., M365 Copilot licensed users can switch the underlying model in everyday Copilot Chat between OpenAI and Anthropic models. A UI indicator shows which model is active.

Available models: Claude Sonnet 4.6 (general queries) · Claude Opus 4.6 (structured reasoning).
Requires: M365 Copilot license + admin enabling Anthropic as subprocessor.

Copilot in Excel

Agent Mode — Claude for spreadsheets

Agent Mode in Excel supports a model picker between OpenAI and Claude. Available for the web version — formula generation, data analysis, error debugging, and direct edits with cell-level citations.

Copilot reads the live workbook including nested formulas and multi-tab dependencies. Makes edits while preserving formula logic, highlights every change with comments.
Requires: M365 Copilot or M365 Premium + Anthropic enabled by admin. ⚠ Late April 2026: admin control becoming per-user / per-Entra-ID-group (Roadmap ID 557371) — currently org-wide toggle.

Researcher Agent

Claude for deep research and analysis

The Researcher agent now runs multi-model intelligence — two modes available in Frontier as of March 31, 2026.

Critique (default on Auto): Two-model pipeline where a second model acts as expert reviewer before the final report is produced — evaluating source reliability, coverage gaps, and evidence grounding.

Council: Anthropic and OpenAI models run simultaneously, each producing a full independent report. A judge model compares them, highlighting where they agree, diverge, and what each uniquely contributed.

Best for: go-to-market strategy, quarterly reports, competitive analysis, multi-document synthesis, any research where source reliability matters.
Access: Frontier programiThe Frontier Program is Microsoft's early-access tier for progressive rollout of new M365 Copilot features. Requires M365 Copilot licence and admin enrolment., M365 Copilot licensed customers. Source: Microsoft Tech Community

Copilot Studio

Build agents on Claude — model dropdown

Copilot Studio offers Claude Sonnet 4.6 and Opus 4.6 via a model dropdown in the agent builder. Mix models per step — Claude for reasoning, GPT for other tasks — within the same multi-agent system.

Fallback: If Anthropic is disabled, Claude-powered agents automatically revert to GPT-5.2 (current default as of March 2026).
Available by default in most geographies from January 7, 2026.
⚠ Late April 2026: AI provider admin control becoming per-user / per-Entra-ID-group (Roadmap ID 557371) — admins can assign Anthropic / xAI to pilot groups or specific teams without enabling it tenant-wide.

Wave 3 · March 2026

Copilot Cowork — multi-step agentic execution

Copilot Cowork is Microsoft's agentic execution layer built on the technology platform that powers Anthropic's Claude Cowork. Runs inside your M365 tenant with full enterprise data protection and access to the complete M365 data graph (Outlook, Teams, SharePoint, Excel, calendar).

Describe an outcome and Cowork creates a plan, reasons across your tools and files, and carries work forward with visible progress and opportunities to steer. Built-in skills include calendar management and daily briefing. Handles one-off tasks and repeatable workflows (e.g. monthly budget review).
Status: Frontier program as of March 30, 2026 — standard Frontier enrolment is now sufficient. Previously a separate Research Preview. Early customer: Capital Group. Source: Microsoft 365 Blog, March 30, 2026

Admin & Compliance

What admins need to configure

Enable path: M365 Admin Center → Copilot → Settings → Data access → AI providers operating as Microsoft subprocessors → Anthropic.

Data routing: Covered by Microsoft's DPA and EDP — however, Claude processing runs on Anthropic's servers (AWS/GCP, US), not in Azure. Excluded from Microsoft's EU Data Boundary.
EU / EFTA / UK: OFF by default, must opt in.
GCC / DoD: Not available.

Default model update for Declarative Agents — March 2026

GPT-5.2 became the default model for M365 Copilot Declarative Agents in a phased rollout beginning March 24, 2026, completing by end of March. This affects newly created declarative agents in Copilot Studio — the default model switches from GPT-4o to GPT-5.2 automatically. Claude remains available as a selectable model option in Copilot Chat, Excel Agent Mode, the Researcher agent, and Copilot Studio. No action is required for tenants that have explicitly selected Claude for their agents.

Key takeaways

Claude is inside M365 Copilot, not just alongside it. Model choice in Copilot Chat, Agent Mode in Excel, Researcher, Copilot Studio, and Copilot Cowork all support Anthropic's Claude. The “Claude vs Copilot” framing is outdated.
It may already be enabled in your tenant. For most commercial clouds (outside EU/UK/EFTA), Anthropic was enabled as a subprocessor by default on January 7, 2026. Check your M365 Admin Center → Copilot → Settings → Data access.
Model switching requires a paid M365 Copilot license. The Claude model picker in Copilot Chat and Excel is exclusive to commercial M365 Copilot subscribers. Free Copilot Chat users stay on the default model.

⚠️ Regional compliance note

EU / EFTA / UK tenants: Anthropic models are OFF by default and require deliberate admin opt-in. Because Claude processing occurs outside Azure and outside Microsoft's EU Data Boundary commitments, organisations subject to GDPR or strict data residency requirements should conduct a formal compliance assessment before enabling.
GCC / Government clouds: Anthropic models are not available. No toggle is present in the admin center.

⚠️ EU/EFTA — Flex routing enabled by default from April 17, 2026

What it is: Microsoft introduced flex routing for M365 Copilot. During peak demand, LLM inferencing calls may be routed outside the EU Data Boundary. Data at rest stays inside the EU Data Boundary (except limited pseudonymized data for security/operational purposes). Data is encrypted in transit and at rest.
Default state: ON for all EU/EFTA tenants from April 17, 2026. This is a change from the EU Data Boundary baseline — admins who have not reviewed this setting should do so before the effective date.
Where to configure: M365 Admin Center → Copilot → Settings → Flexible inferencing during peak load periods. Disable to restrict all inferencing to within the EU Data Boundary.
Who it affects: Finance, legal, government, and any organisation with strict data residency requirements under GDPR or national AI regulations. Review against your data processing agreements before April 17.

What you get — and what's still in preview

A plain-English breakdown of every major Copilot feature: which tier unlocks it, and whether it's in General Availability or the Frontier preview programme.

FeatureCopilot Chat (Basic)Free · includedM365 Copilot (Premium) GA$30/user/moM365 Copilot FrontierPreview · admin opt-in
AI Chat & Core
Web-grounded AI chatAsk anything using public web data
Work-data AI chatGrounded in your emails, docs, meetings via Microsoft Graph
Model choice — Claude / GPT in Copilot ChatSwitch AI model in the main chat interface🚀 Frontier
Pages — collaborative AI canvasShared doc-style workspace for AI-generated content
Outlook
Email summarizationSummarize long threads in one click
Meeting prep briefPre-meeting summary from email thread + calendar
Email drafting with full thread contextDraft reply using complete conversation history
Coaching & tone suggestionsRewrite suggestions, clarity and tone scoring
Schedule with CopilotNatural language meeting scheduling — finds availability, books room, drafts agenda, sends invite · GA March 2026 · Classic Outlook on Windows
Teams
Meeting transcription & summaryFull recap, key points, decisions after every meeting
Follow-up task extractionAction items pulled automatically from meeting transcript
Chat thread catch-upRecap missed channel conversations since you were last active
Video recapNarrated AI highlight reel from meetings of 10+ minutes — English only · GA March 2026
Audio recap — multilingualEN · FR · DE · ES · PT · ZH · IT · JA — GA March 2026
Intelligent Recap without transcriptAI summary from live speech-to-text — no transcript or recording stored. Chapters, topics, mentions, audio recap not available in this mode. Rollout May–Jun 2026.⏳ May–Jun 2026
Word · PowerPoint · Excel
In-app document draftingDraft, summarize, rewrite in Word — grounded in your docs
Presentation generationBuild slides from a Word doc or outline in PowerPoint
Excel Agent ModeMulti-step formula creation, analysis, direct edits with cell-level citations · Desktop GA March 2026 · Basic available to all users (web-only data) — M365 Copilot adds Work IQ and model pickerBasic
Model picker in Excel — Claude / GPTChoose AI model per session — requires Anthropic enabled by admin Requires Anthropic ✓iExcel Agent Mode itself is GA. The Claude model picker within it requires the Anthropic subprocessor toggle enabled in M365 Admin Center — separate from Frontier enrolment.
Excel Copilot — Work IQ contextCopilot draws on org memory and intelligence layer when reasoning over workbooks · GA March 2026
Excel Copilot — local workbook editingDirect AI edits on local .xlsx files on Windows and Mac — previously web-only · GA March 2026
Copilot in Word — advanced authoringTrack changes (word level), contextual comments, table of contents insertion, dynamic page features (headers, footers, margins, page numbers) · Frontier/Insiders Beta Windows now · Mac & Web coming🚀 Frontier
Copilot in Word — inline citationsAutomatically inserts inline citations and footnotes when Copilot adds content from the web or Work IQ data into a document · GA March 2026
PowerPoint — standardize formatOne prompt harmonises fonts, text sizes, and bullet styles across all slides using your company template · GA March 2026 (Web) · Desktop rolling out
PowerPoint — model choice (Claude / GPT)Pick preferred AI model (OpenAI or Anthropic / Claude) when creating or editing presentations. Follows the same pattern as Excel Agent Mode. Requires M365 Copilot licence + Anthropic enabled by admin · Roadmap ID 558443 · Rolling out April 2026⏳ Rolling Apr 2026
SharePoint
SharePoint AI — natural language site buildingDescribe the site you need — Copilot builds it. Preview now · GA May 2026Preview · GA May 2026
SharePoint AI — metadata extractionAutomated document metadata tagging from content · Preview now · GA May 2026Preview · GA May 2026
OneDrive · OneNote
OneDrive — share with summaryCopilot-generated content summary included in the sharing message when sending a file via OneDrive or File Explorer · GA March 2026
OneDrive — Copilot actions in File PreviewReady-to-use Copilot prompts (summarise, generate FAQs, etc.) inside the OneDrive file preview pane — no need to open the full file · Roadmap ID 559481 · Rolling out April 2026⏳ Rolling Apr 2026
Copilot in OneNoteSummarise notes and meeting minutes, draft content from outlines, extract action items · GA January 2026
Copilot Notebooks — GA Features (March 2026 overhaul)
Updated 3-column notebook layoutSources · Notes · Copilot chat panel side-by-sideBasic
Reference-grounded workspace — up to 100 sourcesGround responses in specific docs, emails, or links
Notebook overview pageAuto-generated summary at the top of every notebook
Create with CopilotAI fills the notebook with an overview and structured notes from your sources
Sharing with M365 usersView/edit access, same as a SharePoint document
Copilot Notebooks — Frontier Features (rolling to GA Apr–May 2026)*
Bring whole SharePoint folders as live sourcesEntire folder synced — not file by fileAnnounced GA early Apr 2026*
M365 Groups sharingShare notebooks with Teams channels and group workspacesAnnounced GA April 2026*
Chat → Pages interactivityAdd any Copilot chat response directly to a Copilot Page inside the notebook⏳ GA mid-Apr 2026*
Study guide & quiz generationTurn notebook content into structured learning materials and self-test questions⏳ GA late Apr 2026*
Generate Word doc or PowerPoint deck from notebookOne click from notebook content to full output file⏳ GA May 2026*
Mind map viewAuto-generated visual concept map of topics and relationships across sources⏳ GA early May 2026*
Agent grounding on NotebooksCopilot Studio agents use your notebooks as knowledge sources — GA date TBC🚀 Preview
* GA dates are Microsoft-announced targets from the March 26, 2026 Notebooks announcement. Verify actual availability in your tenant before communicating to users. Source: M365 Copilot Blog — Notebooks enhancements, March 26, 2026
Agents & Automation
Copilot Studio — declarative agentsBuild custom agents with instructions + knowledge sources. No coding.Limited
Researcher agent — multi-model intelligenceCritique mode (two-model pipeline: draft → expert review, default on Auto) or Council mode (Anthropic + OpenAI run simultaneously, judge model compares outputs). 57.4 on DRACO (+13.8% improvement).🚀 Preview
Copilot Cowork — multi-step agentic executionComplex tasks across M365 apps, built with Anthropic. Now in Frontier program (March 30, 2026). Describe an outcome → Cowork plans, reasons, and executes across your M365 data.🚀 Frontier
Security & Compliance (E5 Purview integration)
Purview DLP for Copilot promptsDLP policies apply to Copilot prompts and responses — blocks PII, credit card numbers, classified content from surfacing in Copilot interactions · GA April 2026E5 only
Purview DLP for web queries in CopilotDLP policies extend to Copilot web-grounded queries · Public preview April 2026E5 · Preview
Bulk overshared link remediationIdentify and fix SharePoint links shared more broadly than intended — GA April 2026E5 only
Admin & Analytics
Copilot Dashboard — 1+ license accessUsage and adoption reporting accessible from a single Copilot license · GA April 2026
User satisfaction trackingThumbs up / down on Copilot responses — feeds into usage analytics · GA April 2026
Intent pattern analysisUnderstand how users are prompting Copilot across Outlook, Word, Excel, PowerPoint, Edge, OneNote · Public preview April 2026Preview
Dashboard CSV export — 6 months historyDownload full usage data as CSV with 6 months of history · GA April 2026
Granular third-party AI model provider controlsAssign AI model providers (Anthropic, xAI) to specific users or Entra ID groups in M365 Admin Center — replaces the current org-wide on/off toggle. Enables Claude pilots for a team or security group without enabling tenant-wide · Roadmap ID 557371 · Rolling out late April 2026⏳ Rolling late Apr 2026
Edge — Shadow AI DLP redirectWhen a Purview DLP policy blocks a user's prompt to an external LLM, Microsoft Edge offers a redirect option to M365 Copilot instead. Turns a DLP block into an adoption nudge — relevant for IT admins building a Copilot governance strategy · Roadmap ID 560341 · In development⏳ In development
EU/EFTA flex routing — flexible inferencing during peak loadLLM inferencing may route outside EU Data Boundary during peak demand · ON by default · Admin toggle: Copilot > Settings > Flexible inferencing during peak load periods · Effective April 17, 2026 · EU/EFTA compliance review recommended⚠️ ON by default · Apr 17

Copilot Notebooks — the March 2026 overhaul explained

Show full Notebooks breakdown

Copilot Notebooks received a major overhaul in March 2026. Here is the exact breakdown of what changed, split by GA and Frontier. Based on the Microsoft 365 Copilot Blog and confirmed by Microsoft PM posts.

✅ Now in General Availability (GA)

Updated three-column design

The notebook now has three panels side by side: sources on the left, notes in the middle, Copilot chat on the right. You can reference your sources and chat with Copilot at the same time without toggling between views. The layout makes it easier to stay in one place while working across multiple documents.

Richer reference handling — up to 100 sources

You can now add up to 100 different references to a single notebook: documents, emails, links, Teams chats, SharePoint or OneDrive files. Every Copilot response cites which source it drew from, so you can verify the claim rather than taking the output on trust.

Notebook overview page

When you open a notebook, Copilot automatically generates an overview page summarising what is in it. Useful if you are returning to a notebook after time away or sharing it with a colleague who needs context before diving into the sources.

Create with Copilot

After adding sources, prompt Copilot to fill the notebook automatically — it reads everything you added and creates a structured starting-point document with an overview and key notes organised by theme. Much faster than summarising each source manually one at a time.

Quick Create — audio overview, flashcards, and quiz in one click

From any notebook, one click generates an audio overview (podcast-style summary of your references), a flashcard set, or a quiz. The audio format is particularly useful for exec briefings — a 3–5 minute listen rather than a document to read. Included in the GA March 2026 overhaul.

Sharing notebooks with colleagues

Notebooks are now shareable with any M365 user through standard M365 sharing — view or edit access, same as a SharePoint document. Useful for team research workspaces, project onboarding docs, or collaborative analysis where multiple people contribute sources and notes.

🚀 Now in the Frontier Program — Preview

SharePoint Sites and Folders as live sources GA early April 2026

Point a notebook at an entire SharePoint site or folder — not just individual files. Copilot ingests everything in it, keeps it in sync as content changes, and respects existing M365 permissions. Practical for project documentation libraries, policy folders, or ongoing research collections. The upgrade from "file by file" to "whole site" makes Notebooks usable as a team knowledge layer.

Chat → Pages interactivity GA mid-April 2026

Add any Copilot chat response directly to a Copilot Page inside the notebook and keep editing or iterating on it. Closes the loop between chat exploration and structured notes — you don't lose good output just because it appeared in a transient chat window.

Study guide and quiz generation GA late April 2026

Copilot turns notebook content into structured study guides — key points, definitions, summaries — and generates self-test questions from the material. Designed for education but practical in enterprise contexts for compliance training, product onboarding packs, and internal process documentation.

Share notebooks with M365 Groups GA April 2026

Beyond one-to-one sharing, Frontier adds M365 Groups sharing — notebooks become team-wide knowledge assets. Access updates automatically as group membership changes. Enables a shared research workspace that every team member can contribute to and query.

Generate a Word document or PowerPoint deck from your notebook GA May 2026

One click turns notebook content into a full Word document or a PowerPoint presentation. The agent reads your notes and sources, structures the content, and drops the output into a new file ready to edit. Closes the loop from research to deliverable — the highest-value feature in the whole update for knowledge workers.

Interactive Mind Map GA early May 2026

Auto-generated visual map of topics, concepts, and relationships across your notebook sources. Explorable nodes — click into any theme and view the underlying summary. Currently private to creator during Frontier (30-day retention); sharing and permanent storage added before GA.

Agent grounding on Notebooks Announced March 26 · GA TBC

Ground a declarative Copilot Studio agent on a specific Notebook. The agent draws from that notebook's references for context-aligned responses — without needing to re-add files each time the source material changes. A notebook grounded on a SharePoint site becomes a self-updating agent knowledge base.

Other Frontier features to watch in 2026

🚀 Frontier Preview

Researcher agent

Deep multi-document analysis tool with multi-model intelligence (March 31, 2026). Two modes: Critique (default on Auto) — one model plans, retrieves, and drafts; a second model acts as expert reviewer before the final report is produced, evaluating source reliability, coverage gaps, and evidence grounding. Council — Anthropic and OpenAI models run simultaneously, each producing a complete independent report; a judge model compares outputs. Benchmark: 57.4 on DRACO (13.8% higher than competing models, range 25.3–50.4). Best for go-to-market research, board prep, M&A diligence, and any research where source reliability matters.

Copilot Cowork

Microsoft's agentic execution layer, built on the technology platform that powers Anthropic's Claude Cowork. Describe an outcome — monthly budget review, executive pre-read, competitive brief — and Cowork creates a plan, reasons across your tools and files, and carries work forward with visible progress and opportunities to steer at each stage. Built-in skills include calendar management and daily briefing. Handles one-off tasks and repeatable workflows. Operates entirely within your M365 tenant, enterprise data protection, and security boundaries. Status: Frontier program as of March 30, 2026 — standard Frontier enrolment is sufficient. Previously Research Preview with separate access. Early customer: Capital Group.

✅ GA features that are often overlooked

Excel Agent Mode with model picker

Ask Copilot to build a formula, clean a dataset, or analyse a range across multiple tabs and it executes directly in the spreadsheet — every change marked, every edit undoable. The Claude / GPT model picker is available here too. Web version only as of March 2026.

Copilot Studio — built-in agent builder

Build a declarative agent at m365.cloud.microsoft/chat/agent/new — paste instructions, optionally add knowledge sources, and the agent is immediately available via @mention in Copilot Chat. No coding, no Copilot Studio portal required for simple agents. Included in your M365 Copilot licence.

How to enable Frontier features

Admin enrolment path: Microsoft 365 Admin Center → Copilot → Settings → Frontier program → Enrol tenant. Requires active M365 Copilot licences. Features roll out progressively after enrolment — not everything activates on day one.
User experience: Once enrolled, Frontier features appear directly in the relevant apps with no separate install — Notebooks Frontier features appear inside Copilot Notebooks, Researcher appears as an agent option in Copilot Chat.
Copilot Cowork: Now in the standard Frontier program as of March 30, 2026. Standard Frontier enrolment is sufficient — no separate Research Preview sign-up required. Enrol via M365 Admin Center → Copilot → Settings → Frontier program.
Summary

1-minute takeaway · For leadership briefings

What to tell your CIO or steering committee

  • Start with Copilot Chat for pilots — it's free, has full enterprise data protection, and proves the workflow before committing per-seat budget.
  • Buy M365 Copilot when users are in Outlook 2+ hours/day — meeting summaries and email drafting alone typically recover 30–45 min/week per person. At $18/user/month (promo through June 30), the payback is faster than ever.
  • Don't upgrade to E5 for AI features — E3 and E5 have identical Copilot capabilities. Upgrade to E5 for compliance posture: Insider Risk Management, Advanced eDiscovery, Information Barriers. These are separate decisions.
  • Watch the E7 arithmetic around July 1, 2026 — at promo pricing ($18), the E5+Copilot+Agent 365 bundle ($90) is cheaper than E7 ($99). From July 1, list price reverts to $30 and the bundle hits ~$112 — E7 at $99 saves $13 and includes Entra Suite. Lock in renewal timing accordingly.
  • Claude is already inside your tenant if you have Copilot — for most commercial clouds (outside EU/UK/EFTA), Anthropic was enabled by default in January 2026. Check M365 Admin Center → Copilot → Settings → Data access.

Change log & sources

Every update to this document is tracked here with the source used to verify it. Findings are classified by confidence level at the time of update.

Confidence rubric: HIGH (0.85–0.99) = verified against official Microsoft source. MED (0.70–0.84) = derived from roadmap or indirect signal, not yet confirmed in production docs. Changes are applied immediately at HIGH; held one week at MED.

Version 6 — Updated April 16, 2026

DateSectionChangeSourceConfidence
2026-04-15§01§02Copilot tier rename + access restriction (effective April 15, 2026). "Copilot Chat" is now officially labelled "Copilot Chat (Basic)"; paid tier is now "M365 Copilot (Premium)". Behaviour change by tenant size: Tenants with 2,000+ users — Copilot Chat (Basic) completely removed from Word, Excel, PowerPoint, and OneNote (no button, no panel). Access remains in Outlook (email + calendar grounding) and the M365 app/web. Tenants with fewer than 2,000 users — Copilot Chat (Basic) stays in Office apps but is downgraded to "Standard Access" (capacity-limited responses) with in-product upsell prompts to upgrade to Premium. No change for paid M365 Copilot licensed users. §01 tier cards, §02 table headers, and Executive Snapshot updated accordingly. Background: Microsoft had made Copilot Chat free inside all M365 apps in September 2025 — this reverses that decision.MC1253858 (>2,000 user tenants) · MC1253863 (<2,000 user tenants) · both published March 17, 2026HIGH 0.92
2026-04-15§07Model choice in PowerPoint — rolling out April 2026 (Roadmap ID 558443). Users can now select preferred AI model (OpenAI or Anthropic/Claude) when creating or editing presentations in PowerPoint. Follows existing model choice in Excel Agent Mode. Requires M365 Copilot licence + Anthropic enabled by admin.M365 Roadmap ID 558443 · Rolling out April CY2026HIGH 0.90
2026-04-15§07OneDrive: Copilot actions in File Preview — rolling out April 2026 (Roadmap ID 559481). Ready-to-use Copilot prompts now surface directly inside the OneDrive file preview pane — users can summarise documents, generate FAQs, and more without opening the full file. Available to M365 Copilot licensed users.M365 Roadmap ID 559481 · Rolling out April CY2026HIGH 0.90
2026-04-16§07Edge: Shadow AI DLP redirect — in development (Roadmap ID 560341). When a Purview DLP policy blocks a user's prompt to an external LLM, Microsoft Edge will now offer a redirect option to M365 Copilot instead. Governance implication: Microsoft is using compliance infrastructure (DLP) as a funnel to steer shadow AI usage toward licensed, governed tooling. Relevant to IT admins building a Copilot governance strategy — this turns a DLP block into an adoption nudge. §07 Admin & Governance section updated.M365 Roadmap ID 560341 · In developmentMED 0.80
2026-04-16§06§07Granular third-party AI model provider controls — rolling out late April 2026 (Roadmap ID 557371). Admins will be able to assign AI model providers (Anthropic, xAI) to specific users or Entra ID groups via Microsoft Admin Center — replacing the current org-wide on/off toggle. This allows orgs to give Claude access to a pilot group, a specific team, or a security group, without enabling it for everyone. Supports Entra ID group-based access management. Currently the control is binary (Anthropic enabled or disabled tenant-wide); this adds user- and group-level granularity. §06 admin note and §07 feature table updated. Rollout begins late April 2026.M365 Roadmap ID 557371 · Rolling out late April CY2026HIGH 0.90

Version 5 — Updated April 10, 2026

DateSectionChangeSourceConfidence
2026-03-31§07Teams — Video recap now GA: narrated highlight reels generated from meetings of 10+ minutes (English only). Available alongside standard meeting recap. Feature status table in §07 updated. Teams — Audio recap in 7 additional languages now GA: French, German, Spanish, Portuguese, Chinese (Simplified), Italian, Japanese. Previously English-only. §07 updated.What's New in M365 Copilot — March 2026HIGH 0.90
2026-03-31§07SharePoint AI — public preview: natural language site building (describe the site you need, Copilot builds it) and automated metadata extraction from documents. Worldwide GA expected May 2026. §07 feature status table updated.What's New in M365 Copilot — March 2026HIGH 0.90
2026-03-31§07Excel Copilot — two GA additions: Work IQ context (Copilot now draws on your org's memory and intelligence layer when reasoning over spreadsheets) and local workbook editing on Windows and Mac (previously web-only). §07 feature status table updated.What's New in M365 Copilot — March 2026HIGH 0.90
2026-04-08§07Copilot in Word — new authoring capabilities rolling out via Frontier program and Office Insiders Beta Channel (Windows): track changes at word level (precise diff-style edit tracking), contextual comments (Copilot adds inline comments explaining edits), table of contents insertion, and dynamic page features (headers, footers, margins, page numbers). Mac and Word for Web support coming. Feature status table in §07 updated.M365 Copilot Blog — New Word capabilities, April 8, 2026HIGH 0.92
2026-04-07§02Purview DLP for Copilot prompts — GA: DLP policies now apply to Copilot prompts and responses, blocking sensitive data (PII, credit card numbers, classified content) from surfacing in Copilot interactions. Purview DLP for web queries in Copilot — public preview. Bulk overshared link remediation (SharePoint) — GA. E5 Purview integration row in §02 updated.M365 Copilot Blog — Security, Management & Analytics, April 7, 2026HIGH 0.92
2026-04-07§02Copilot Analytics updates (April 7, 2026): User satisfaction tracking (thumbs up/down on Copilot responses) — GA. Copilot Dashboard accessible with 1+ Copilot license — GA (previously required a minimum threshold). Intent pattern analysis across Outlook, Word, Excel, PowerPoint, Edge, and OneNote — public preview, rolling this month. CSV dashboard data export with 6 months of history — GA.M365 Copilot Blog — Security, Management & Analytics, April 7, 2026HIGH 0.90
2026-04-10§07Intelligent meeting recap available without saving transcript (Roadmap ID 558286, upcoming). Microsoft is decoupling AI insight generation from data retention: meeting organisers can enable Copilot recap without saving a transcript or recording. The AI summary is generated from live speech-to-text and discarded after the session. Available: AI-generated meeting summary. Requires a saved transcript (not available in transcript-free mode): chapters, topics, mentions, audio recap. Controlled via tenant-level AI toggle; on by default where AI experiences are enabled. Meeting organiser can also enable or disable per session. Licence: M365 Copilot ($30/user/month). Rollout: Targeted Release mid-May to late May 2026 · Worldwide GA early June to mid-June 2026. Platforms: Windows, Mac, Web, Mobile. Primary use cases: executive meetings where recording is prohibited, legal and compliance-sensitive discussions, regulated industries (finance, government) where transcript retention conflicts with policy.M365 Roadmap ID 558286 · Message Center (admin access required) · Public roadmap page requires JavaScript — not publicly indexableMED 0.75

Version 4 — Updated March 31, 2026

DateSectionChangeSourceConfidence
2026-04-03§02§03§05Copilot add-on pricing updated to $18/user/month promotional price through June 30, 2026 (list price $30 from July 1). All cost-stack totals recalculated: E3+Copilot ~$54 (was $66), E5+Copilot ~$75 (was $87), E5+Copilot+Agent 365 ~$90 (was $102). E7 arithmetic updated: at promo price, E7 ($99) is $9 more expensive than the bundle ($90); E7 becomes the arithmetic winner from July 1 when list price applies ($112 bundle vs $99 E7). Decision tree, cost ladder, scenarios, exec summary, and takeaway section all updated accordingly. Also added: Copilot Tuning (5,000+ licences required, Frontier April 2026, worldwide June 2026) and Project Manager Agent (worldwide GA April 2026) noted in §04.Microsoft 365 Packaging & Pricing UpdatesWhat's New in M365 Copilot — March 2026HIGH 0.95
2026-03-31§07§06Copilot Cowork status updated: moved from Research Preview to Frontier program (March 30, 2026). Standard Frontier enrolment now sufficient — separate Research Preview sign-up no longer required. Cowork description updated with: built-in skills (calendar management, daily briefing), repeatable workflows, Capital Group early customer quote, and clarification that Cowork is built on the technology platform that powers Anthropic's Claude Cowork. DRACO benchmark corrected: Researcher with Critique scores 57.4 (13.8% improvement; other models range 25.3–50.4).Microsoft 365 Blog — Copilot Cowork now in Frontier, March 30, 2026HIGH 0.95
2026-03-31§07§06§02Researcher multi-model intelligence update (March 30, 2026 announcement). Two new modes added: Critique (two-model pipeline — draft model + expert reviewer model, default when Auto selected) and Council (Anthropic and OpenAI models run simultaneously, judge model compares outputs). Researcher with Critique scores 57.4 on DRACO (13.8% improvement; other models range 25.3–50.4). Updated in §02 table sub-description, §06 Researcher news card, §07 Frontier panel Researcher description, and §07 feature table row.Microsoft Tech Community — Multi-model intelligence in Researcher, March 30, 2026HIGH 0.95
2026-03-29§07New section added: Feature Status — GA vs Frontier Preview. Full feature breakdown table (Free / M365 Copilot GA / M365 Copilot Frontier) across all apps plus Copilot Notebooks deep-dive. Covers GA overhaul (3-column layout, 100 sources, overview page, Create with Copilot, sharing) and Frontier preview features (SharePoint folder sync, Word/PowerPoint agent, mind map, study guide, M365 Groups sharing, agent grounding).M365 Copilot Blog — March 2026 Notebooks announcementMicrosoft Learn — What's new in M365 CopilotHIGH 0.90
2026-03-29§04§02Agent 365 description substantially expanded after reviewing official Microsoft Learn documentation. Agent 365 is not only a governance console — it is the full MCP infrastructure and Work IQ intelligence platform for M365 Copilot agents. Work IQ confirmed as the official Microsoft product name (three layers: Data, Memory, Inference). Agent 365 catalog includes Work IQ MCP servers for Outlook, Calendar, Teams, SharePoint, OneDrive, Word, User, and Dataverse, plus a MCP Management Server for building custom servers with 1,500+ connectors. Work IQ MCP features are currently in preview. Work IQ concept box added to §02. "Copilot Memory" revert: Work IQ is the correct Microsoft term.Microsoft Learn — Work IQ MCP overview (Agent 365) — Last updated 2026-03-27HIGH 0.95
2026-03-29§02§06§07Accuracy audit: (1) Researcher & Analyst agents correctly marked as Frontier in §02 table; (2) Model choice corrected to Frontier-only in §07 table (was incorrectly shown as GA); (3) "Work IQ" renamed to "Copilot Memory" (official Microsoft product name); (4) Frontier concept box corrected — Agent Mode in Excel removed from Frontier list (it is GA; only the Claude picker within it requires Anthropic enabled); (5) Teams sub-text updated — removed unsourced "30-day" qualifier; (6) Claude model versions unified to 4.6 in current-state sections; (7) "GPT-o4" corrected to "OpenAI o-series reasoning model"; (8) Jan 6 date fixed to Jan 7 in Copilot Studio card; (9) Agent 365 / E7 rows annotated with GA May 1, 2026 qualifier; (10) Source links added to Wave 3 SKUs, timeline entries, and cost table footnote.Internal accuracy audit against Microsoft Learn documentation, product announcements, and cross-section consistency check. Note: a previous pass incorrectly renamed "Work IQ" to "Copilot Memory" — reverted in same session after official documentation confirmed Work IQ as the correct Microsoft product name.HIGH

Version 3 — Updated March 27, 2026

DateSectionChangeSourceConfidence
2026-03-27§02§03E3 base plan price increases from ~$36 to ~$46/user/month effective July 1, 2026. Cost stack table and True Cost card updated to show both current and post-July prices.Microsoft 365 Pricing and Packaging UpdatesDec 4, 2025 pricing announcementHIGH 0.95
2026-03-27§02§03E5 base plan price increases from ~$57 to ~$67/user/month effective July 1, 2026. Cost stack table and True Cost card updated.Microsoft 365 Pricing and Packaging UpdatesM365 Packaging and Pricing FAQHIGH 0.95
2026-03-27§02§03Copilot add-on ($30/user/month) confirmed unchanged through July 2026 pricing update. ✓ notation added to cost stack table.M365 Packaging and Pricing FAQ — "does not apply to standalone Microsoft Teams or Copilot SKUs"HIGH 0.95
2026-03-27§05E7 decision logic updated: post-July the E5+Copilot+Agent 365 stack rises to ~$112, making E7 at $99 a $13/user/month saving (was $3). E7 card bullet updated.Derived arithmetic from confirmed E3/E5 price changes above. Same official sources.HIGH 0.92
2026-03-27§06GPT-5.2 became the default model for M365 Copilot Declarative Agents — phased rollout began March 24, 2026, completing end of March. Note added clarifying Claude remains available as a selectable option.M365 Copilot Blog — March 24, 2026HIGH 0.88
2026-03-27§02Security Copilot agents added to E5 feature list: included at no extra cost, 400 SCUs/month per 1,000 licences (max 10,000 SCUs/month), rolling out 2026.M365 Packaging and Pricing Updates FAQHIGH 0.88

Changes are sourced by a weekly automated pipeline (Reddit Scout + Official Source Monitor + Change Analyst) comparing Microsoft official channels against document facts. All HIGH-confidence findings are applied immediately. MEDIUM findings are held for one additional week of monitoring.

Sources

April 2026 · Wave 3 Edition · v6 · Updated April 16, 2026
Mathieu Kessler · kesslernity.com

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