The News: Microsoft is incorporating its Copilot generative AI technology into the Dynamics 365 product family at no additional cost to enterprise license holders, reflecting a strategy designed to get enterprise customers familiar with the technology and its benefits to users with little risk. In several analyst briefings held during July, Microsoft representatives reiterated that enterprise and premium users of its Dynamics 365 offerings would incorporate the GPT-based tools with zero upcharge above the license fee, and that no price increases would be adopted as the features roll out over the next few months.
Microsoft’s Zero-Upcharge Copilot Strategy May Elevate GenAI Adoption
Analyst Take: Microsoft is rolling out Copilot, its role-based companion designed to increase productivity and personalize interactions across its various products within the Dynamics 365 family, including Dynamics 365 Sales and Viva Sales, Dynamics 365 Customer Service, Dynamics 365 Customer Insights, Dynamics 365 Marketing, Dynamics 365 Business Central, and Microsoft Supply Chain Center, which Microsoft Dynamics 365 Supply Chain Management can access. For holders of Enterprise and Premium licenses, these Copilot features are included within the same license agreement, with zero upcharge. Further, Microsoft representatives repeatedly told analysts that there are no plans to increase product subscription fees because of the inclusion of GPT features.
Zero Upcharge for Incorporating Copilot Reduces Risk for Enterprise Customers
Many organizations are rightly concerned about incorporating generative AI features. The unpredictable nature of generative AI, combined with the significant data management and data privacy issues, has led many organizations to adopt a relatively conservative – and prudent – approach to rolling out generative AI.
Microsoft has gone to great lengths to discuss the ways in which it is deploying generative AI in a responsible way, but its decision to include this technology in its enterprise-level Dynamics 365 adds an additional layer of trust between Microsoft and its customers. Rather than charge an additional fee for customers to test out the features, functions, and – most importantly – the return on investment from deploying Copilot, Microsoft is letting its enterprise users experiment with the functions, with zero upcharge for per-user, per-month, or consumption of generative AI resources.
As a result, customers can try out various Copilot use cases, user or role profiles, and applications to find the right combination for an immediate rollout of the technology, as well as for future planning purposes – a shrewd move, considering that some competitors, such as Salesforce, have announced that GPT features will require an upcharge.
Risks to Microsoft for Deploying Generative AI Within Existing License Agreements
The inclusion of GPT functionality via Copilot is welcome news for Microsoft Dynamics 365 customers, as well as organizations that may be considering those solutions. The zero-upcharge strategy does not come without risks. Including these generative features may, in some ways, lessen their perceived value to customers, particularly among heavy users of the technology, who may not realize the scale of resources that are being consumed to provide these features. After all, once something is provided for “free,” it is significantly more difficult to assign monetary value in the future.
One hedge, of course, is that Microsoft is charging $30 per user, per month, for access to Copilot features within its Office 365 product family. Highlighting this pricing strategy may help illustrate the value of Copilot that is being delivered gratis within its Dynamics 365 product family, and may help Microsoft in the future, should it choose to reevaluate its pricing strategy for Copilot.
Enterprises Still Need to Take a Thoughtful Approach to Generative AI
Although Microsoft’s zero-upcharge strategy for Copilot within Dynamics 365 will make it financially easier for customers to identify the right use cases, features, and users for Copilot, the onus is still on enterprise customers to ensure they are taking a thoughtful approach to rolling out the technology.
Microsoft may be able to demonstrate further value – and generate additional services revenue – by helping organizations analyze the suitability of their company data for deploying Copilot effectively, as well providing assessments on which use cases can deliver the most value quickly, based on each customer’s specific industry, customer type, department, and typical role type.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other insights from The Futurum Group:
Microsoft Announces General Availability of Sales Copilot
Microsoft Dynamics 365 ERP is Being Revved up by Microsoft Copilot
Microsoft Takes ‘AIM’ at On-Premises Customers
Author Information
Keith Kirkpatrick is Research Director, Enterprise Software & Digital Workflows for The Futurum Group. Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.
