Microsoft launches $99 Microsoft 365 E7 bundle with Copilot AI to boost workplace adoption

Microsoft Launches New $99 Per Month AI-Focused Software Bundle

Microsoft Corp. is launching a new bundle of workplace software with the aim of getting more people to use its artificial intelligence tools for the office. The E7 bundle will cost $99 per user per month -- a 65% price increase from Microsoft's previous flagship bundle. It will include a slew of widely used tools such as Word and Excel as well as the company's Copilot AI assistant and a feature that lets administrators assess how AI is being used within their company. Demand for Microsoft's AI tools prompted the new bundle's introduction, said Jared Spataro, who oversees workplace applications. "If we can put that together for customers, it makes it easier for them to purchase and deploy and makes it much easier for us to sell." Microsoft said in January that more than 450 million business users pay for its office tools. Still, only about 3% of them are also paying for Copilot, the company's business-focused answer to ChatGPT. Compliance and security concerns are frequently cited as roadblocks to implementing workplace AI. In November, Microsoft unveiled a tool that helps customers monitor and manage how the technology is being used. Inclusion of this tool, dubbed Agent 365, is a major selling point of the new software package, Spataro said. The E7 bundle is cheaper than buying each tool separately, Microsoft said. Bundling a wide array of software has been key to Microsoft's success in persuading businesses to standardize on its products. It has been more than a decade since the company announced its last flagship bundle, dubbed E5.

Microsoft adds higher-priced Office tier with Copilot as it tries to juice sales with AI

The new top-of-the-line bundle for corporate workers, Microsoft 365 E7, will cost $99 per user, per month, compared with $60 for the E5 subscription, after upcoming price hikes. E7 includes the $30 Copilot, $12 Entra identity tools and the new $15 Agent 365 product for managing companies' AI agents. Microsoft has sunk more than $100 billion in the past year into data center infrastructure, including Nvidia chips that can power AI models. Selling AI offerings is one way to show a return on that investment. For customers that pay for E7 or the stand-alone Copilot, Microsoft is introducing Copilot Cowork, stemming from a partnership with AI model developer Anthropic. It will handle tasks with multiple steps, such as sending regularly scheduled emails to colleagues and preparing for meetings with documents and internal calls. Copilot Cowork will become available as a research preview this month to clients enrolled in Microsoft's Frontier program, which provides early access to AI features. The launch comes after updates to Anthropic's Claude Cowork service made some investors worry about AI models posing competitive threats to mature software companies. The Copilot upgrades and the launch of the E7 tier on May 1 should both lead to further adoption of Copilot, Judson Althoff, CEO of Microsoft's commercial business, told CNBC in an interview. The existence of E7 should also inspire organizations to upgrade more workers to E5, he said. "The majority of our base is E5 now, right?" he said. "And then we're going through healthy renewal cycles on E5 right now. But E5 was created pre the agentic world."