New Agent Capabilities for the Free Microsoft 365 Copilot Chat App

Infused with the zealotry of true believers, Microsoft announced Copilot for All on January 15, 2025 to reveal the details of the complicated Copilot renaming they previewed in December. And the new logo, of course.

In a nutshell, Microsoft is creating an “on-ramp” to give Microsoft 365 tenants that haven’t invested in expensive Microsoft 365 Copilot licenses the chance to use agent technology “grounded in Microsoft Graph data.” The idea here is to encourage commercial customers to run a mix of Copilot with some having the full-blown licensed version while others experience with the free-to-use version. Figure 1 shows the relative capabilities of the two Copilot options.

.Lots of Functionality in Microsoft 365 Copilot Chat

The free-to-use Microsoft 365 Copilot Chat app includes a lot of functionality in terms of its ability process user prompts against information available on web sites (providing those sites are indexed by Bing). Recently, Microsoft added features like Copilot pages and the image generator (Figure 2). Microsoft says that limitations exist on the number of images that can be generated daily. I guess I don’t create many images as I haven’t experienced any problems.

The Chat client has enterprise data protection, so data is secure, protected, and actions are audited and captured in compliance records.

Pay-as-you-go Agents

The big news is that customers will be able to create and run custom agents grounded against “work data” on a pay-as-you-go (PAYG) metered basis. PAYG means the tenant must sign up for an Azure subscription with a valid credit card before the agent will run. Agent activity will be charged against the subscription. Grounding against work data means that the agents can interrogate information available in the Microsoft Graph. This includes data stored in Exchange, Teams, SharePoint, and OneDrive plus anything imported into the Graph through a third-party connector. This is where the magic lies because if an organization can import its data into the Graph, agents can reason over that data to create responses to user prompts, providing PAYG is set up for the tenant.

The custom agents are developed with Copilot Studio. I have spent some time working with Copilot Studio to build simple agents over the last few weeks. It’s not a terribly difficult task, but organizations do need to take the time to chart out how they plan to develop, deploy, and manage agents rather than rushing headlong into the brand-new world. Like any software, agents work best when some structure is in place.

The Big Differences between Microsoft 365 Copilot Chat and Microsoft 365 Copilot

Paying for agents to use Graph data does not deliver the full suite of capabilities enjoyed by those who invest in Microsoft 365 Copilot licenses. Figure 1 shows that Microsoft 365 Copilot includes a bunch of personal assistants where Copilot is built into Microsoft 365 apps like Teams, Word, Outlook, PowerPoint, and Excel. Sometimes, as in the case of the automatic document summary generated by Copilot in Word, the help is unwanted, but the personal assistants are very good at helping with other tasks, like summarizing long email threads or recapping Teams meetings.

Microsoft 365 Copilot also includes SharePoint Advanced Management (SAM). However, although Microsoft announced at Ignite 2024 that tenants with Microsoft 365 Copilot licenses would get SAM in early 2025, there’s no trace of these licenses turning up in any tenant that I have access to. License management can be complex and I’m sure that SAM will turn up soon.

Finally, PAYG access to Graph data does not include the semantic index. The index is generated automatically from Graph data in tenants with Microsoft 365 Copilot licenses to create a vector-based index of the relationships of items in the Graph. It’s an untrue urban legend that Microsoft 365 Copilot needs the semantic index to function. The semantic index enhances search results, but it’s not required for the chat app or agents to work.

In Simple Terms, Two Copilot Products

It’s easy to become confused by the naming of different elements within the Microsoft 365 Copilot ecosystem. It boils down to Microsoft offering free (with PAYG capabilities) and expensive Copilot products to Microsoft 365 customers. Microsoft obviously hopes that the free version will act as the on-ramp to full-fledged Copilot. It’s a reasonable tactic. Time will tell if it’s successful.

Insight like this doesn’t come easily. You’ve got to know the technology and understand how to look behind the scenes. Benefit from the knowledge and experience of the Office 365 for IT Pros team by subscribing to the best eBook covering the Microsoft 365 ecosystem.