Microsoft's AI Shift and Fastest Ever Changes with Mary Jo Foley

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Who should listen: Microsoft 365 service owners, licensing and procurement leads negotiating EAs, and IT strategists trying to build a defensible Copilot and agent plan amid rapidly shifting SKUs and consumption pricing.

Guest: Mary Jo Foley — Editor in Chief, Directions on Microsoft

Mary Jo Foley, a technology journalist of 41 years and now Editor in Chief at independent advisory firm Directions on Microsoft, reflects on four decades covering Microsoft and what the AI land-grab is doing to enterprise planning. She and Tom Arbuthnot cover Copilot naming confusion, consumption-based agent pricing, the gap between marketing and product readiness, and how enterprises are re-thinking licence allocation.

Many thanks to AudioCodes, sponsor of this episode.

Key insights

• Microsoft is shipping AI capability far earlier than it ever shipped software or cloud services, and names, pricing and licensing terms are moving constantly — Foley's view is that just as you think you understand a service, it has been renamed, moved to another product group and repriced. ▶ 8:04
• The low-code/no-code question is now open: with GitHub Copilot generating code, customers are asking whether they still need the Power Platform. In practice the lines blur — traditional low-code teams are stretching into Azure Functions for AI work, while Copilot Studio alone covers a lot of ground without dropping into code. ▶ 10:06
• Teams Copilot is what actually sells Microsoft 365 Copilot for most organisations, with meeting recap and summary still among the highest-used workloads because it solves a problem everyone recognises — action items you would otherwise forget you were assigned. ▶ 15:09
• Microsoft pushed customers into Copilot pilots before the guardrails story was ready, then came back to talk about Purview and getting the data estate in order. That sequencing made organisations gun-shy — the fear being that someone in accounting suddenly surfaces the CEO's salary — and explains why many still have Copilot Chat switched off despite it being included in the licence. ▶ 19:14
• When Microsoft 365 Copilot went GA, Excel Copilot was still preview and effectively broken, which Microsoft did not publicise. Excel was the scenario customers were most excited about, so the miss coloured perceptions of the whole suite even though Teams, Word and PowerPoint were usable. Anyone who trialled Copilot a year ago is evaluating a materially different product today. ▶ 20:48
• Over-marketing is the current risk: set expectations at 150 and deliver 110 and users conclude it is broken. Knowledge workers who get an imperfect answer often abandon the tool, when getting 80% of the way there with a human check is the realistic target. ▶ 21:19
• Consumption-based agent billing is the main enterprise worry — when Copilot Chat suggests an agent it is not clear whether the user is incurring cost, and finance teams budget to fixed numbers, not variables. Compounding this, features increasingly ship switched on with a 30-day window to opt out, so admins learn about them from support tickets. ▶ 22:52
• Security Copilot's Security Compute Unit metric has flummoxed Directions' customers: Microsoft's only guidance is to start with three, and once customers see the monthly cost plus overage SCUs, many decline even to pilot. ▶ 24:24
• E5 does not include everything — there is a stack of per-user, per-month add-ons, particularly around agents, on top of the $30 Copilot seat, Teams Premium and Power BI extras. Directions itself only licensed a subset of staff for Microsoft 365 Copilot, monitored usage and reassigned unused licences, treating Copilot Chat as the freemium tier to identify who genuinely needs the full seat. ▶ 25:56

Insights summarised by AI from the episode transcript, reviewed by the Empowering.Cloud team.

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