This guide summarises all current Microsoft Copilot licensing tiers, what each includes, who it is designed for, and key considerations when recommending the right option to clients. Pricing shown in USD unless noted; GBP equivalents will vary. 

1. Overview 

Microsoft Copilot is not a single product – it is a family of AI-powered tools built on top of Microsoft 365, ranging from a free consumer chatbot to a full enterprise AI platform. Critically, the paid business tiers are all add-on licences: they require a qualifying M365 base subscription to work. 

There are currently seven distinct tiers to be aware of: 

• Microsoft Copilot (Free) 

• Microsoft 365 Copilot Chat (Included with M365) 

• Microsoft 365 Premium (Consumer / Individual) 

• Microsoft 365 Copilot Business (SMB add-on, ≤300 users) 

• Microsoft 365 Copilot / Enterprise (Enterprise add-on) 

• Microsoft 365 E7 (All-in-one enterprise bundle) 

• Microsoft Copilot Studio (Custom agent builder) 

 

2. At a Glance – Comparison Table 

Licence	Who It’s For	Price/User/Mo	Org Data Access
Copilot (Free)	Consumers	Free	No
M365 Copilot Chat	All M365 users	Included	Limited
M365 Premium	Individuals	~£10-15	No
Copilot Business	SMB (≤300 users)	$18 → $21	Yes
Copilot (Enterprise)	Enterprise	$30	Yes
M365 E7	Enterprise all-in	$99	Yes (full)
Copilot Studio	Developers/IT	Pay-per-use	Custom agents

 

3. Licence-by-Licence Breakdown 

 

3.1  Microsoft Copilot (Free) 

Microsoft Copilot   |   Free / Consumer   No cost
Who it’s for	Anyone — consumer use via browser, Edge, Windows, or the Copilot app
What’s included	Web-grounded AI chat. Access via copilot.microsoft.com, Bing, Edge, and Windows.
Data access	Internet only. No access to organisational files, emails, or Teams data.
Base licence needed	None
Key limitation	No business data awareness. Each session starts fresh with no organisational context.
Gardner relevance	Useful to show clients as a baseline — helps frame the value of paid tiers.

 

3.2  Microsoft 365 Copilot Chat 

M365 Copilot Chat   |   Included with M365   No additional cost
Who it’s for	All users with any Microsoft 365 business or enterprise subscription
What’s included	AI assistant integrated into Teams, Outlook, Word, and Excel. Ability to build no-code custom AI agents.
Data access	Limited — it has no automatic awareness of org data, roles, or structure unless manually provided in the chat prompt. (Expected to change July 2026.)
Base licence needed	Any Microsoft 365 Business or Enterprise plan
Key limitation	Requires manual context — not truly ‘org-aware’ yet. Significant upgrade available via paid Copilot tiers.
Gardner relevance	Good starting point for low-cost AI introduction. Create a wedge for Copilot Business upsell.

 

3.3  Microsoft 365 Premium (Individual) 

Microsoft 365 Premium   |   Consumer / Individual   ~£10–15/month
Who it’s for	Individual consumers — NOT a business licence
What’s included	Office suite, OneDrive, plus enhanced Copilot features (formerly Copilot Pro): latest reasoning engine, faster responses, better image generation.
Data access	Personal OneDrive/files only. No business data or Microsoft Graph integration.
Base licence needed	Standalone consumer product
Key limitation	Not for business use. Sometimes confused with M365 Business Premium — important to distinguish clearly.
Gardner relevance	Unlikely to be relevant for business clients. Worth flagging if they ask about Copilot Pro (now discontinued as a standalone).

 

3.4  Microsoft 365 Copilot Business (SMB) 

Copilot Business   |   SMB Add-on (≤300 users)   $18/user/mo → $21 from Jul 2026
Who it’s for	Organisations with up to 300 users on Business-tier M365 plans
What’s included	Work IQ search across SharePoint, emails, and documents. Copilot in Teams, Outlook, Word, Excel, PowerPoint. Copilot Researcher and Analyst agents. Copilot Studio access at no extra cost.
Data access	Full org data via Microsoft Graph — respects existing permissions. Cannot surface data users do not have access to.
Base licence needed	M365 Business Basic, Business Standard, Business Premium, or M365 Apps for Business
Key limitation	300-user cap (can coexist with Enterprise plans in the same tenant). Data governance dependent on base licence quality.
Gardner relevance	Primary SMB upsell. Strong value story alongside Business Premium. Promotional pricing window closing July 2026.

 

3.5  Microsoft 365 Copilot (Enterprise) 

M365 Copilot (Enterprise)   |   Enterprise Add-on   $30/user/month
Who it’s for	Enterprise organisations — no user cap
What’s included	Same capabilities as Copilot Business: Work IQ, Copilot in all M365 apps, Researcher, Analyst, and Copilot Studio access. Role-based Copilots (Sales, Service, Finance) included at no extra cost since late 2025.
Data access	Full org data via Microsoft Graph. Quality of results increases significantly with E3/E5 data governance tools in place.
Base licence needed	M365 E1/E3/E5, Office 365 E1/E3/E5, M365 Business Standard/Premium
Key limitation	On E1 base licences, adoption and feature completeness are notably lower. E3 is the recommended minimum for full value.
Gardner relevance	Core enterprise Copilot product. Best paired with E3 or E5 estate for full ROI. Can increase per-seat cost by 40–100% depending on base plan.

 

3.6  Microsoft 365 E7 (All-in-One Bundle) 

Microsoft 365 E7   |   Enterprise Bundle   $99/user/month (GA May 2026)
Who it’s for	Enterprise organisations wanting a single, comprehensive licence covering M365, security, and AI
What’s included	Bundles M365 E5, Copilot for M365, the Entra Suite (identity & access), and Agent 365 — Microsoft’s new control plane for managing AI agents at scale.
Data access	Full – everything in E5 plus Copilot and agentic AI capabilities.
Base licence needed	Standalone – replaces separate E5 + Copilot purchases
Key limitation	High price point. Best value for organisations already at E5 who also want Copilot.
Gardner relevance	Important for enterprise renewal conversations. Worth modelling against E5 + Copilot add-on to show cost delta.

 

3.7  Microsoft Copilot Studio 

Copilot Studio   |   Developer / IT Add-on   Consumption-based (Copilot Credits)
Who it’s for	Organisations that want to build custom AI agents – particularly for external-facing use (e.g. website chatbots) or autonomous background processes
What’s included	Build, customise, and manage AI copilots within the Microsoft ecosystem. 25,000 Copilot Credits included with the standard licence. Pay-as-you-go via Azure also available.
Data access	Custom – agents connect to whatever data sources are configured.
Base licence needed	Requires an underlying M365 licence for internal users. Credits consumed per interaction/task complexity.
Key limitation	Complexity increases for external or autonomous agents. Internal employee use is typically covered by the standard Copilot licence.
Gardner relevance	Relevant for clients with customer-facing automation needs or complex workflow requirements. Also included at no extra cost within Copilot Business/Enterprise licences for internal use.

 

Important Notes & Caveats 

• Pricing shown in USD. GBP equivalents vary and should be confirmed via the Microsoft partner portal or CSP pricing. 

• Copilot Pro has been discontinued – replaced by M365 Premium for consumers. Avoid confusion with M365 Business Premium. 

• Copilot Studio is required for any external-facing or autonomous agents, even if the user holds a full Copilot licence. 

• E7 became generally available 1 May 2026. Verify current availability and pricing with Microsoft before client proposals. 

• Utilisation data indicates approximately 3.3% of M365 subscribers hold active Copilot licences – licence audits before renewal are recommended for clients with existing deployments. 

 

If you’re unsure which Copilot licence is right for your business, we’re here to help.

Whether you’re exploring AI for the first time, reviewing existing licences, or looking to maximise the value of Microsoft 365, our team can help you assess your requirements and recommend the most cost-effective option.

Get in touch for a Copilot licensing review or AI readiness discussion.

📧 sales@gardnersystems.co.uk
📞 0151 220 5552
🌐 www.gardnersystems.co.uk