Copilot, Copilot, Copilot… Co… Confusion: Understanding Microsoft’s Rapidly Changing Copilot Products

Observations

What’s Changed as of Late 2025

• Copilot Pro was discontinued. It lasted less than a year as a standalone add-on and was replaced in October 2025 by the new Microsoft 365 Premium plan.
• A new SMB-tier was launched. Microsoft 365 Copilot Business debuted December 1st, 2025, at a lower price point specifically for organisations with 1–300 users – effectively a cheaper version of the full enterprise Copilot.
• Copilot Chat gained a limited in-app presence. From August to October 2025, even the free Copilot Chat tier began appearing in Word, Excel, PowerPoint, OneNote, and Outlook – but with significant restrictions (web-only, no Microsoft Graph access, no in-document actions like rewrite/insert).
• Security Copilot is bundled into M365 E5. Starting in November 2025, Security Copilot is included with Microsoft 365 E5 at no additional cost.
• ACCC action. Worth noting for your IBRS context: Australia's ACCC sued Microsoft in October 2025, alleging it misled ~2.7 million users about cheaper plan options by bundling Copilot into Office 365 and raising prices. Microsoft has refunded impacted users.

Microsoft Copilot Offerings as of Q1 2026

Detailed Product Descriptions

Microsoft 365 Copilot Chat (Free Tier)

Copilot Chat is available at no additional cost to all Microsoft Entra ID users with an eligible Microsoft 365 subscription. As of late 2025, Copilot Chat is available in Word, Excel, PowerPoint, OneNote, and Outlook – but responses are grounded in web and open documents only; it cannot access emails, meetings, other files, or Microsoft Graph, and cannot perform in-document actions like rewrite or insert. Agents can be run via Copilot Chat but require an Azure subscription and incur metered charges.

Microsoft 365 Copilot Business (New December 2025)

As of December 1st, 2025, the Microsoft 365 Copilot Business promotional price is AU$26.91 per user per month for customers with any Microsoft 365 Business plan, down from AU$31.40 per month (prices exclude GST; promotional window runs until March 31, 2026). The new subscription is available to organisations with 300 or fewer employees. It includes the same features as before: access to the AI assistant in apps such as Excel, Teams, and Outlook, as well as Copilot agents and tools, including Notebooks.

Limitations: Maximum 300 seats. Requires a qualifying M365 Business plan (Basic, Standard, or Premium). Cannot be purchased by enterprise E-plan customers. Promotional pricing lasts for 12 months, then reverts to ~AU$31.40 plus GST.

Microsoft 365 Copilot (Enterprise/Full)

The original flagship product. Full in-app Copilot across Word, Excel, PowerPoint, Outlook, Teams, OneNote, Loop, SharePoint, plus full Microsoft Graph grounding (your emails, meetings, files, and chats). Microsoft now also bundles Copilot for Sales, Copilot for Service, and Copilot for Finance under a single SKU, increasing functionality without raising costs, reflecting Microsoft's late-2025 shift toward unified AI value delivery.

The commercial offer is currently priced at AU$44.90/user/month (annual commitment) and is available for purchase through Cloud Solution Provider (CSP) partners.

Limitations: Requires a qualifying base licence (E3, E5, Business Standard, Business Premium). Annual commitment required. No trial available (though Copilot Chat can be trialled for free).

Microsoft 365 Premium (Replaced Copilot Pro)

Copilot Pro was a 2025 consumer plan add-on to give unlimited AI access. It lasted less than a year before being dropped in favour of the Microsoft 365 Premium plan, added in October 2025. The Premium plan is now the only way for an individual to get greater Copilot access within the Microsoft 365 apps.

The Microsoft 365 Premium annual price in Australia is AU$329.00, inclusive of GST. This is a standalone annual subscription for one Copilot user, not a per-month add-on. Up to five additional sharing users are allowed on Family plans, but they do not get Copilot access.

Security Copilot

Microsoft Security Copilot is now included with Microsoft 365 E5, effective 18th November 2025. This update introduces new Microsoft-built agents across Defender, Entra, Intune, and Purview to help security teams automate investigations and respond faster. Existing E5 customers receive the included version at no additional cost.

Small to Medium Business (SMB) Bundle Pricing Summary (AUD, via CSP)

For Australian SMBs evaluating Copilot Business bundles, Microsoft is bundling M365 Copilot Business with existing Microsoft 365 Business SKUs: Business Basic + Copilot Business at $27/user/month; Business Standard + Copilot Business at $33.50/user/month; Business Premium + Copilot Business at $43/user/month. These are USD figures; the AUD equivalents from Microsoft AU's page are approximately proportional.

The Microsoft 365 Copilot App – Naming Collision & Confusion

In January 2026, Microsoft began redirecting personal, family, and business Microsoft 365 (Office) procurement to a page that offered the Microsoft 365 Copilot App. Microsoft’s statement on this product change is available here.

However, this announcement is about renaming the portal/launcher app itself, not the product names themselves. It creates significant branding confusion. In essence, the Microsoft 365 Copilot App is merely a rename of the Office portal, not a license for AI features.

What the Announcement Actually Says

The Microsoft 365 (Office) app is now called the Microsoft 365 Copilot app across web (office.com, microsoft365.com), mobile (iOS, Android), and Windows. The new app name and icon reflect Copilot’s integration into Microsoft 365. The app icon and name began rollout on January 15th, 2025.

The web URL has also been updated to m365.cloud.microsoft to align with Microsoft's broader unified domain for all Microsoft 365 apps. Both office.com and microsoft365.com URLs will automatically redirect.

In simple terms, the app you used to open to access your Office files (variously called by users "Office", "Office 365", "Microsoft 365") is now called the "Microsoft 365 Copilot app". This is a branding/packaging change, not a new product.

The underlying functionality is the same portal/launcher.

Next Steps

• Have the Copilot and desktop support teams become familiar with the different versions of Copilot so they can address misconceptions of staff who may be switching between personal and family plans for personal usage, and the enterprise Copilot deployment (which should be a phased deployment, as discussed in Reframing the Copilot ROI Problem and How Microsoft’s Licensing Creates Copilot Proof of Concept Problems). Consider creating an FAQ similar to Table 1 above, and keep it up to date so support staff can respond appropriately.
• Monitor Microsoft’s rapidly changing portfolio, including the inclusions and exclusions of different Copilot packages.
• Plan for July 2026 price increases: From 1st July 2026, most commercial Microsoft 365 Business and Enterprise suites will cost more per user, per year at list price. Microsoft is tying this rise to three sets of added capabilities: Copilot Chat in Word, Excel, PowerPoint, Outlook, and OneNote; Agent Mode and new agents; and expanded Defender for Office and Intune endpoint management features. The increases range from 5 per cent to 33 per cent, depending on the plan tier, with Frontline plans hit hardest.

Footnotes

1. Understanding the Graph Barrier: The primary difference between the free and paid tiers is access to the Microsoft Graph. This is the semantic layer that connects your data across the Microsoft 365 ecosystem. Without Graph (Free Tier): Copilot acts like a standard web-chat AI. It can see the file you have open but cannot remember an email you received yesterday or a meeting from this morning. With Graph (Business/Enterprise): Copilot has a holistic view of your tenant. It can synthesise data from Teams chats, Outlook calendars, and SharePoint files to perform complex tasks.