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Why Does Microsoft Copilot Matter?
AI is now a strategic priority for organizations aiming to stay competitive. Microsoft Copilot brings enterprise-grade AI directly into workplace tools, improving productivity, collaboration, and customer experience.
In 2025 Microsoft updated Copilot with GPT-5 smart mode, which improves accuracy, response speed, and contextual reasoning. Combined with Microsoft Graph, Copilot delivers assistance that is both relevant and reliable across Microsoft 365 and Dynamics 365 applications.
This guide explains what Microsoft Copilot is, its price, where it fits into the Microsoft ecosystem, and how AlphaBOLD can help you leverage it effectively.
What's New: December 2025 Updates
Microsoft 365 Copilot Business for SMBs:
Effective December 1, 2025, Microsoft launched Microsoft 365 Copilot Business—a new offering specifically designed for small and medium-sized businesses with fewer than 300 users. This represents a significant price reduction from the standard $30/month enterprise pricing.
- Price: $21 per user/month (down from $30)
- Eligibility: Organizations with 1-300 users
- Requirement: Microsoft 365 Business Basic, Standard, or Premium subscription
- Features: Same capabilities as enterprise Copilot—AI in Office apps, agents, Notebooks
New SMB Bundle Pricing (December 2025)
| Bundle | Price/User/Month | Promo (Dec-Mar 2026) |
|---|---|---|
|
Business Basic + Copilot Business |
Basic + $21 |
15% off Copilot |
|
Business Standard |
$30.50 |
15% off Copilot |
|
Business Premium + Copilot Business |
$43 |
25% off Bundle |
Note: Promotional pricing runs from December 1, 2025 to March 31, 2026. Contact AlphaBOLD to take advantage of these limited-time offers.
Security Copilot Now Included with Microsoft 365 E5
At Microsoft Ignite 2025, Microsoft announced that Security Copilot will be available to all Microsoft 365 E5 customers at no additional cost. This represents a significant value addition for enterprise customers.
- Rollout began: November 18, 2025 for existing Security Copilot + E5 customers
- SCU Allocation: 400 Security Compute Units per 1,000 E5 licenses monthly
- Maximum: Up to 10,000 SCUs per month (for 25,000+ licenses)
- Overage Rate: $6 per SCU/hour (vs. $4/hour provisioned rate)
- Notice: 30-day advance notification before activation
Example: An organization with 4,000 E5 licenses receives 1,600 SCUs monthly. An organization with 400 licenses receives 160 SCUs monthly. Unused SCUs do not roll over.
Copilot Chat Expansion:
Microsoft has expanded Copilot Chat availability to all Microsoft 365 users at no additional cost:
- Available now: Secure AI chat grounded in web results
- Rolling out (Sept-Oct 2025): Copilot Chat in Word, Excel, PowerPoint, Outlook, OneNote
- Preview March 2026: Inbox and calendar context awareness
- Early 2026: Agent Mode in Copilot Chat and Office apps
July 2026 Microsoft 365 Price Increases
On December 4, 2025, Microsoft announced pricing updates for Microsoft 365 suite subscriptions effective July 1, 2026. These changes reflect expanded AI, security, and management capabilities being added to the suites.
| Plan | Current Price | July 2026 Price | Change |
|---|---|---|---|
|
Business Basic |
$6/user/month |
$7/user/month |
+$1 (17%) |
|
Business Standard |
$12.50/user/month |
$14/user/month |
+$1.50 (12%) |
|
Business Premium |
$22/user/month |
$22/user/month |
No change |
|
Office 365 E1 |
$10/user/month |
$12/user/month |
+$2 (20%) |
|
Office 365 E3 |
$23/user/month |
$26/user/month |
+$3 (13%) |
|
Microsoft 365 E3 |
$36/user/month |
$40/user/month |
+$4 (11%) |
|
Microsoft 365 E5 |
$57/user/month |
$60/user/month |
+$3 (5%) |
Key Justifications for Price Increases:
- Security Copilot included with E5
- Microsoft Defender for Office P1 added to O365 E3 and M365 E3
- Intune Suite capabilities added to M365 E3 and E5
- URL checks added to E1, Business Basic, and Business Standard
- 1,100+ new features released in the past year
Strategic Recommendation: Renew subscriptions before July 1, 2026 to lock in current pricing. Contact AlphaBOLD to discuss renewal and upgrade strategies.
Microsoft Copilot Suite: Complete Pricing Reference
| Product | Use Cases | Pricing Structure | Notes |
|---|---|---|---|
|
M365 Copilot Business [NEW] |
SMBs (<300 users) |
$21/user/month |
Dec 1, 2025 |
|
Microsoft 365 Copilot |
Enterprise E3/E5 |
$30/user/month |
Annual subscription |
|
Copilot Pro (Consumer) |
Individuals, M365 Personal/Family |
$20/user/month |
Requires M365 sub |
|
Copilot Chat |
All M365 users |
Included |
No additional cost |
|
Copilot Studio |
Custom GPTs, chatbots |
$200/tenant/month |
25K messages |
|
Security Copilot (E5) |
M365 E5 customers |
Included |
400 SCU/1K licenses |
|
Security Copilot (Standalone) |
Security professionals |
$4/SCU/hour |
$6/hour overage |
|
Dynamics 365 Copilot |
Sales, Service, Marketing |
Varies by module |
Included in Premium |
Further Reading: Dynamics 365 Licensing Guide 2025 & 2026 Updates
Core Technologies Powering Microsoft Copilot
Microsoft Copilot runs on two foundational technologies: Large Language Models (LLMs) and Microsoft Graph. Together, they allow Copilot to deliver responses that are both context-aware and business-relevant.
- Large Language Models (LLMs): With GPT-5 smart mode, Copilot dynamically selects the best model for each task. This improves reasoning, accuracy, and response speed across applications such as Word, Excel, Outlook, Teams, and Dynamics 365.
- Microsoft Graph: This connects Copilot to organizational data including emails, files, calendars, chats, and CRM records. Graph ensures Copilot understands relationships, projects, and workflows, so its recommendations are relevant to your business context.
Microsoft Security Copilot: Benefits and Pricing
Microsoft Security Copilot is an AI assistant designed for security professionals. It integrates with Microsoft Defender, Sentinel, Entra, Intune, and Purview to analyze incidents, recommend actions, and generate investigation reports.
Pricing Model (Updated December 2025):
- Microsoft 365 E5 Customers: Included at no additional cost (400 SCUs per 1,000 licenses monthly)
- Provisioned SCU: $4 per Security Compute Unit (SCU) per hour
- Overage SCU: $6 per SCU per hour when usage exceeds provisioned capacity
- Annual Cost Estimate: ~$35,000/year for 1 SCU, ~$105,000/year for 3 SCUs (recommended minimum)
Where Else Can You Use Microsoft Copilot?
Microsoft Copilot extends across the Microsoft ecosystem:
- Viva Sales: Drafts email responses, summarizes CRM activity, and provides customer insights
- Power Platform: Creates apps, automates workflows, and builds chatbots with natural language prompts
- Dynamics 365: Assists service agents, helps marketers personalize campaigns, supports sales lead qualification
- Power BI: Natural language queries to generate data visualizations and insights.
Further Reading: Copilot for Power BI: Take Productivity to the Next Level
Optimize Your Microsoft Copilot Investment
AlphaBOLD simplifies the Microsoft Copilot Licensing process through structured assessments, license optimization, and customization. Our approach includes license optimization, Copilot readiness assessments, role-specific enablement, and ongoing strategy.
Request a DemoConclusion: Strategic Planning for 2026
The December 2025 announcements represent the most significant changes to Microsoft Copilot pricing since its launch. Organizations should take immediate action:
- Evaluate SMB Copilot Business: If you have fewer than 300 users, the new $21/month pricing offers substantial savings
- Leverage E5 Security Copilot: If you have M365 E5, prepare for automatic Security Copilot activation
- Renew Before July 2026: Lock in current pricing before the July 1, 2026 increases take effect
- Capture Promotional Discounts: Take advantage of December 2025-March 2026 promotional pricing
- Build AI Governance: Establish training, validation workflows, and data governance before broader rollout
