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Microsoft Doubles Down On Generative AI, Announcing Copilot Pricing And New Generative AI Skills

Microsoft clearly isn’t backing down in the race for generative AI. Since announcing that ChatGPT would be added to its Bing search engine back in February, we’ve seen Microsoft deliver a continuous drip of bold announcements regarding generative AI capabilities. July saw that trend continue.

First: the news most of us have been waiting for—how much does Copilot cost? At its recently held annual Inspire event, Microsoft announced pricing on its AI-supported Copilot app for customers using Microsoft 365 E3, E5, Business Standard and Business Premium. As a reminder, Copilot was announced in March 2023 and is an AI assistant that works across Microsoft apps to help automate tasks as well as create content. This includes things like auto-generative PowerPoint Presentations and taking notes in Microsoft Teams meetings. According to Microsoft, Copilot will be available for $30 per user per month, which seems fairly reasonable, even to the smaller business owner. It’s still unclear when Copilot will be available on a mass scale, however. It’s currently available to just about 600 enterprise customers globally—I expect that to increase substantially in the next quarter.

In addition to Copilot news, Microsoft announced that it is expanding Bing Chat to include a variation specifically for the enterprise, as well as Visual Search capabilities.

First, Bing Chat Enterprise. It’s a work-focused version of Bing Chat that allows users to ask questions and get answers using generative AI but for work purposes. According to the site, it can do things like help write a sales pitch, compare marketing strategies or create a SWOT analysis for a specific project. Similar to the regular Bing Chat, it uses web data and provides citations so users know exactly where the information they’re receiving is sourced from. According to Microsoft, user and business data will be secured, and Microsoft itself will have a “no eyes-on access” to it. Business data will not be used to train LLM models. Bing Chat enterprise is available in preview form and is free with Microsoft 365 E3, E5, Business Standard and Business Premium plans. Stand-alone offerings will be available sometime in the future—sorry for the vague timeline—for $5/month per user.

Next, Visual Search via Bing Chat is already rolling out in desktop and mobile variations. The function is similar to Google Image Search, which allows you to search for information with an image, rather than text. This is super useful in trying to determine the source or veracity of a photo, for instance. Microsoft says it’s hoping to bring Visual Search to Bing Chat Enterprise soon. Not a huge announcement, but still worth sharing.

In other Copilot news, Microsoft 365 and Dynamics 365 is adding a new sales-specific Copilot—aptly named Sales Copilot—to its offering. This variation of Copilot is specifically for sales teams and is meant to connect users’ CRM, Microsoft 365 and Teams apps. Sales Copilot’s skills include creating emails based on Dynamics 365 Sales data, auto-generating summaries of customer data from Teams, Outlook, and Dynamics, and real-time tips for use during Teams meetings. Although it’s a Microsoft tool, it can be added to other CRMs like Salesforce, although that will require licensing costs. Again, we’re seeing a focus on curating data from various sources and generating a document, report, or email that doesn’t just save time but adds value for the end user.

Microsoft’s Focus on Generative AI: What’s Next?

This week, Microsoft released its Q4 earnings report which showed that the generative AI has buoyed performance over the last quarter. Despite a slight decline in Azure revenue YoY, the growth was still 26%. There was also a 10% increase in Microsoft’s productivity and business process segment. This overall resulted in a revenue increase of 8%. In the near term, investing in its AI ambitions will come with a cost, but the company’s CFO Amy Hood indicated that it expects the investment to payoff in the latter part of its fiscal year, which started July 1. Overall, I believe that Microsoft has done a good job of building its portfolio to take advantage of its OpenAI partnership—furthermore, I appreciate that the company is approaching commercialization in a more transparent way to help investors understand how AI impacts the company’s business performance.

What I see next for Microsoft in its generative AI venture is a steady rise in competition, but this shouldn’t scare Microsoft or its stakeholders. As Microsoft continues to layer generative AI capabilities into its apps across Dynamics, Teams, Office, and Windows, we can be sure Google, Amazon, Salesforce, SAP, Adobe, Oracle, and a many others will be eager to respond. In general, I think we’ll be seeing new partnerships and alliances forming as every business in Big Tech seeks out the ultimate everything generative AI solution. In response to Microsoft’s specific Sales Copilot launch, for instance, we might see Google and Salesforce partner together for an alternative sales assistant solution—two powerhouses with complementary capabilities banding together to avoid obsolescence. As of now, Google’s variations of Copilot, Duet AI, isn’t gaining tons of traction. And Salesforce just announced the cost of its generative AI service, Sales GPT, at $50/month. The service is available immediately, and features include generating responses to customer questions and creating summaries of customer interactions. It’s yet to be seen how this tool fairs against Microsoft Sales Copilot. However, in many cases we may see a heterogeneous environment where generative AI tools from a several vendors co-exists—giving something for developers and AutoGPT to build around.

In the near term, it’s no secret that Microsoft is benefiting from its aggressive early market positioning and diverse generative AI products versus many of its competitors due to its partnership with OpenAI. Its big issue now is getting users to the cloud so that they can utilize Copilot and fending off the competitive overtures which are going to continue to evolve across the portfolio. With its new program, AIM (accelerate, innovate, move) to help businesses with this transition, I’m more confident in its ability to execute. I’d say most companies are already at least somewhat cloud-functional at this point, but it’s smart of Microsoft to face the potential issue head-on. If users are not on the cloud, its unlikely they will benefit from all that Microsoft Copilot has to offer.

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