Copilot Versions: Free, Business, M365, and Beyond
Understand the key differences between Microsoft Copilot versions — free, Business, Microsoft 365, and E7 — so you can recommend the right one for any organisation.
The Copilot ecosystem
Think of Copilot like a car brand with different models — they all say “Copilot” on the badge, but the features inside are very different.
The free version is like a basic sedan — it gets you from A to B. Copilot for Business adds GPS and cruise control. Copilot for Microsoft 365 is the full luxury model — it works inside your Word, Excel, Teams, and Outlook AND connects to your organisation’s data.
As a leader, the version you pick determines what your people can actually do with AI at work.
Feature comparison
| Feature | Copilot (Free) | M365 Copilot Chat | M365 Copilot (~$30/user/mo) |
|---|---|---|---|
| Web search and chat | Yes | Yes | Yes |
| Image generation | Yes | Yes | Yes |
| Enterprise data protection | No | Yes | Yes |
| Access to work data (Graph) | No | No | Yes — in every M365 app |
| Copilot in Word, Excel, PowerPoint | No | No | Yes |
| Copilot in Outlook and Teams | No | No | Yes |
| Meeting summaries in Teams | No | No | Yes |
| Copilot Studio agents (build) | No | Pay-as-you-go | Included |
| Researcher and Analyst agents | No | No | Yes |
| IT admin controls | No | Yes | Yes |
| Compliance and audit logs | No | Yes | Yes |
What about Copilot Pro?
Copilot Pro ($20/user/month) was a consumer add-on that brought Copilot features into personal M365 apps (Word, Excel, PowerPoint). Microsoft retired Copilot Pro in 2025, shifting focus to the enterprise Copilot for M365 offering.
For the exam, focus on the three tiers that matter for business decision-makers: free Copilot, M365 Copilot Chat, and Copilot for Microsoft 365.
Understanding the tiers
Copilot (Free) — copilot.microsoft.com
Best for: individuals exploring AI, personal use, no work data involved.
- Chat with AI using web knowledge
- Generate images with DALL-E
- Upload files for analysis (in chat only)
- No connection to your organisation’s data
- No enterprise data protection — your prompts may be used to train models
- No IT admin controls
Microsoft 365 Copilot Chat — for your organisation
Best for: organisations wanting enterprise-grade AI chat with data protection at no extra cost.
- Same chat capabilities as free, but with commercial data protection
- Web-grounded only — does not access organisational data through Microsoft Graph
- Available at copilot.microsoft.com
- Pay-as-you-go model for Copilot Studio agents
- IT admins control access and policies
- Available to all M365 commercial tenants at no extra cost
- Does NOT include Copilot embedded in M365 apps or work data grounding
Copilot for Microsoft 365 — the full experience
Best for: organisations ready to embed AI into everyday productivity across all M365 apps.
- Everything in Copilot Chat, plus:
- AI embedded in Word, Excel, PowerPoint, Outlook, Teams, OneNote, Loop
- Meeting summaries, chat catchup, and real-time assistance in Teams
- Copilot in Excel for data analysis and formula generation
- Draft, rewrite, and summarise in Word
- Create presentations from prompts or documents in PowerPoint
- Researcher and Analyst power agents included
- Full Copilot Studio access for building custom agents
- Requires: Qualifying M365 licence (E3, E5, Business Basic, Business Standard, Business Premium, F1/F3, and others) + ~$30/user/month
💰 Priya evaluates versions for Meridian Consulting
Priya Sharma, CFO at Meridian Consulting, needs to decide which Copilot version to deploy for the firm’s 200 consultants.
Option A: Free Copilot for everyone
- Cost: $0
- Priya’s concern: “No data protection. Our consultants handle client-sensitive data. Using the free version could violate our client contracts.”
- Verdict: Eliminated immediately.
Option B: M365 Copilot Chat only
- Cost: $0 (already included in their M365 E3 licences)
- Benefit: Enterprise data protection, work mode for searching company data
- Limitation: Consultants can’t use Copilot inside Word, Excel, or PowerPoint
- Verdict: Good starting point, but consultants spend 70% of their time in M365 apps.
Option C: Copilot for M365 for all 200 consultants
- Cost: ~$30 x 200 =
$6,000/month ($72,000/year) - Benefit: Full AI in every app, meeting summaries, Researcher for client work
- Verdict: Significant investment. Priya wants to see ROI first.
Priya’s decision: Start with M365 Copilot Chat for all 200 (free), plus Copilot for M365 for 50 senior consultants (~$18,000/year). Measure productivity gains over 90 days, then expand if ROI is proven.
Exam tip: Phased rollout is the smart answer
When the exam presents a “which version should this org choose?” scenario, the best answer usually involves a phased approach:
- Start with M365 Copilot Chat (free, enterprise-grade) for broad access
- Add Copilot for M365 for high-value users first (senior staff, heavy M365 users)
- Measure ROI, then expand based on evidence
The exam rewards answers that balance value with cost discipline — not “give everyone the most expensive version.”
Choosing the right version: decision guide
| Your Situation | Recommended Version | Why |
|---|---|---|
| Individual exploring AI personally | Copilot (Free) | No cost, no work data needed |
| Organisation wants enterprise chat with data protection | M365 Copilot Chat | Free with M365, commercial data protection |
| Teams that live in Word, Excel, PowerPoint daily | Copilot for M365 | AI embedded in the apps they use |
| Executive team needing deep research and analysis | Copilot for M365 | Researcher and Analyst agents included |
| Organisation wanting maximum security + Copilot in one licence | Microsoft 365 E7 | Copilot bundled with advanced compliance |
| Small business with under 300 users | Copilot for M365 (via Business Premium) | SMB-friendly licensing path |
Elena's consultants at Meridian handle sensitive client data and spend 80% of their time in Word and Excel. Elena wants AI assistance but Priya, the CFO, is cost-conscious. What's the best initial approach?
Ravi is evaluating Copilot tiers for TechVantage Solutions. His developers already use GitHub Copilot but the rest of the company needs M365 productivity features. Which Copilot capability is ONLY available in Copilot for Microsoft 365, and NOT in M365 Copilot Chat?
🎬 Video coming soon
Next up: Copilot Chat: Web, Mobile and Work Experiences — dive deeper into Copilot Chat’s three modes and when to use each.