One IT leader at a UK top 50 law firm tells Legal IT Insider: “At that price point, on top of the inevitable price hike on renewal of the M365 license, unless there is an infinite amount of work coming in, something is going to have to give.”
Microsoft has announced that Microsoft 365 Copilot will be priced at $30 per user, per month, for Microsoft 365 E3, E5, Business Standard and Business premium customers, when it becomes available. The timing of its launch will be shared in the coming months.
Copilot, which combines the power of large language models with your data in the Microsoft Graph and Microsoft 365 apps, will provide firms with an entirely new way of working, enabling users to engage with applications across the 365 suite in natural language. It will be accessed directly in apps such as Word, Excel, PowerPoint, Outlook and Teams, or via a natural language chatbot accessible in Teams, called Business Chat.
Price was probably always going to be an issue, given Microsoft’s need to recoup the billions of dollars that it has invested in OpenAI, creator of the GPT large language model that is behind Copilot, and the compute power involved. However, that price tag is steep – above what was expected – and for many firms will double or treble the cost of using MS 365, begging the question whether it will put law firms off becoming early adopters.
One IT leader at a UK top 50 law firm told Legal IT Insider: “The previews and demos of Copilot have been pretty impressive and there are clear opportunities to improve productivity and streamline business practices… but at $30 per user per month on top of an E3 or E5 subscriptions ($36k a year per 100 users), firms are going to have to be pretty clear on the business drivers for taking on those licenses, and how to realise the benefits.”
They added: “It’s an obvious point, but if you improve productivity you need fewer people to do the same amount of work. At that price point, on top of the inevitable price hike on renewal of the M365 license, unless there is an infinite amount of work coming in, something is going to have to give. It seems expensive as a bolt-on if nothing else changes, but may be excellent value if it allows a firm to downsize its headcount.”
Further comments came from the IT director of a large UK firm, who said: “At the price point for our firm we would be looking at an extra £1M , and at that level of outlay we will have to ensure that we can absolutely get the value from these, no doubt useful tools.”
Speaking in an interview with the Financial Times, Satya Nadella, Microsoft’s chief executive, defended the pricing decision as part of a generational shift in technology that would bring a new dimension to one of the software company’s core products. “I would think of this as the third leg” of Office, he said, after applications such as Word and Excel and cloud services like Teams. He claimed the new AI features “are the same class of value”, automating routine work and increasing productivity. Perhaps unsurprisingly, Microsoft’s shares rose to an all-time high after it announced the new pricing.
Microsoft also yesterday (18 July) announced the launch of Bing Chat Enterprise, an AI-powered “chat for work” with commercial data protection. Microsoft says Bing Chat Enterprise will mean user and business data is protected and will not leak outside of the organisation. It’s encrypted in transit, chat data is not saved, and Microsoft has no eyes-on access to it. Bing Chat Enterprise is included at no further cost in MS 365, E3, E5, Business Standard and Business Premium. You can read more about that here.
caroline@legaltechnology.com