Microsoft is expanding its AI push inside Office by launching a new Microsoft 365 E7 subscription tier and additional Copilot capabilities, moves aimed at driving more enterprise adoption of its AI tools and increasing revenue per user.
The new E7 bundle, priced at $99 per user per month, will combine several AI-related services into a single package for corporate customers. It includes the $30-per-month Copilot add-on, $12 Entra identity tools, and Agent 365, a new $15 product designed to help organizations manage AI agents. The bundle will sit above the company’s E5 plan, which costs $60 per user per month after upcoming price increases.
Alongside the new tier, Microsoft is introducing a feature called Copilot Cowork, built through a partnership with AI startup Anthropic. The tool is designed to carry out multi-step workplace tasks — such as preparing for meetings by reviewing internal documents and calls, or sending scheduled emails to colleagues. Microsoft plans to release Copilot Cowork as a research preview later this month to customers in its Frontier program, which gives enterprises early access to new AI features.
The product rollout comes as Microsoft seeks to demonstrate returns on the massive infrastructure investments it has made to support AI services. Over the past year, the company has spent more than $100 billion on data center infrastructure, including Nvidia chips used to run AI models.
For Microsoft, AI-powered productivity tools have become a key way to increase revenue from its existing customer base. While growth in the number of Microsoft 365 users has slowed — commercial seats rose 6% in the latest quarter — the company has been generating more revenue from each user by layering on new services such as Copilot.
Microsoft 365 commercial products and cloud services already account for 30% of the company’s total revenue, highlighting the importance of its productivity software business. The addition of E7 is designed to extend that strategy by bundling AI capabilities and management tools into a higher-priced offering targeted at large organizations.
Microsoft executives say the new tier reflects how AI is reshaping workplace software. Judson Althoff, CEO of Microsoft’s commercial business, said many organizations are already running E5 licenses, but that product was designed before the rise of AI-powered agents. The E7 bundle is intended to align Microsoft’s enterprise software stack with that emerging “agentic” model of work.
Industry analysts say the additional identity, management, and security tools bundled into E7 could also make it easier for large companies to deploy AI safely across their organizations. By packaging these capabilities together, Microsoft aims to simplify adoption for enterprises that may otherwise have to assemble multiple tools from different vendors.
Microsoft has already seen significant early demand for Copilot. In January, CEO Satya Nadella said the company had reached 15 million paid Copilot seats, representing about 3% of commercial Microsoft 365 subscriptions.
The E7 launch also comes as investors watch the growing competition between AI model developers and established software companies. Recent updates to Anthropic’s own Claude Cowork service have raised concerns in some corners of the market that AI assistants could eventually compete with traditional enterprise software platforms.
Microsoft’s strategy, however, centers on embedding AI inside the productivity tools many businesses already rely on, from Outlook and Teams to Excel and PowerPoint. Analysts say that if AI-driven work continues to happen primarily within those applications, it could drive increased usage of Microsoft’s existing software — and strengthen its hold on the enterprise productivity market.
This analysis is based on reporting from CNBC.
Image courtesy of Unsplash.
This article was generated with AI assistance and reviewed for accuracy and quality.
