The News: On September 21, Microsoft unveiled a series of announcements that the company is bringing AI into some of the most used software applications on the planet, Windows OS and Microsoft 365, as well as Bing and Edge.
Here are the key details:
- According to press materials, Copilot “will be your everyday AI companion. Copilot will uniquely incorporate the context and intelligence of the web, your work data and what you are doing in the moment on your PC to provide better assistance – with your privacy and security at the forefront. It will be a simple and seamless experience, available in Windows 11,
- Microsoft 365, and in our web browser with Edge and Bing. It will work as an app or reveal itself when you need it with a right-click. We will continue to add capabilities and connections to Copilot across to our most-used applications over time in service of our vision to have one experience that works across your whole life.”
Microsoft 365 Copilot will generally be available to commercial customers starting November 1, with a more powerful version of M365 Chat and new capabilities for Copilot in Outlook, Excel, Loop, OneNote, OneDrive, and Word. - A new Windows 11 update will be available starting September 26, featuring Copilot and new AI-powered experiences to apps such as Paint, Photos, and Clipchamp.
- Bing and Edge will gain features such as personalized answers, Microsoft Shopping, Content Credentials, and DALL.E 3 in Bing Image Creator. Bing Chat Enterprise will also get a few upgrades including support for multimodal visual search, and Image Creator will now be available in the Microsoft Edge mobile app.
Read the full details of the Microsoft Copilot announcements on the Microsoft website.
Microsoft Copilot Will Be the AI Inflection Point
Analyst Take: With the most used enterprise software and operating system in the world, Microsoft has placed a significant bet on AI with the introduction of Copilot. Millions, possibly billions, of people will soon have a chance to use AI. Here are the key takeaways for Copilot:
Rewards in Getting It Right
If Copilot rolls out smoothly, AI will become a mass market technology within the next 18 months. Microsoft will be tasked with educating the world and training the world how to best use AI tools.
If Copilot can seamlessly orchestrate apps as envisioned, work and personal productivity will rise simply based on Microsoft users alone, and fundamentally change the way we interact with software. Its success or even the promise of its success will spur even greater investment by enterprises to leverage the power of AI.
For Microsoft specifically, a Copilot success will solidify the company’s stranglehold market share for Windows OS and Microsoft 365 applications. It could create greater opportunities for Microsoft to gain market share in enterprise applications the company does not currently dominate, such as sales/marketing/customer relationship management (CRM) solutions such as Salesforce and Adobe and enterprise resource planning (ERP)-type software (SAP, Oracle, ServiceNow, etc.). Microsoft Teams becomes more powerful and increases Microsoft’s potential to grab more market share in collaboration tools. Finally, a Copilot success might give Microsoft a chance to break Google’s dominance in search.
Risks in getting It Wrong
If Copilot stumbles, it could set the market adoption of AI back significantly, simply because so many people are affected. Confidence and trust in what AI can do will be eroded.
For Microsoft specifically, there is a great deal of risk. There will not be a lot of tolerance for even minimal stumbles. Company stock could be affected. The Microsoft 365 suite could lose market share, and the opportunities to gain market share in CRM, ERP, and search will evaporate.
What Microsoft Has To Do To Succeed
Microsoft must deal with/solve the built-in challenges of large language models (LLMs), primarily accuracy, bias, and hallucination. In the keynotes at the announcement event in New York, it sounded like Copilot will work across devices in real time. Are there minimum specification/requirements for Copilot to function? Connectivity? If so, is there a minimum speed? Processor specs? Will Copilot function on devices locally that might not have constant connectivity? Will latency be an issue for Copilot? This query is related to the previous question. Functionality in returning answers and so forth is usually affected by connectivity speed and (to an extent) processing power.
Microsoft will also have to educate the public, a monumental task. The Copilot vision is a paradigm shift in how we interact with computers and software.
Conclusions
In discussions with Microsoft’s top management at the New York announcement event, there was a sense of confidence in what is coming. The company is fully aware of the risks in getting it wrong. Microsoft has an opportunity to lead the world into the AI era. It has the AI experience and frameworks to deploy AI responsibly. Although there will likely be some bumps as Copilot rolls out, there is a good chance Microsoft gets this right.
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 Brings Next-Generation AI To Frontline Workers
Microsoft’s Zero-Upcharge Copilot Strategy May Elevate GenAI Adoption
Author Information
Mark comes to The Futurum Group from Omdia’s Artificial Intelligence practice, where his focus was on natural language and AI use cases.
Previously, Mark worked as a consultant and analyst providing custom and syndicated qualitative market analysis with an emphasis on mobile technology and identifying trends and opportunities for companies like Syniverse and ABI Research. He has been cited by international media outlets including CNBC, The Wall Street Journal, Bloomberg Businessweek, and CNET. Based in Tampa, Florida, Mark is a veteran market research analyst with 25 years of experience interpreting technology business and holds a Bachelor of Science from the University of Florida.
