Copilot is Microsoft’s AI assistant — and it comes in several flavors with very different licenses, prices, and promo deals active right now. This is the only guide you need to cut through the confusion and pick the right plan.
1. The Foundation: M365 Business Plans
Before you can add Copilot, you need a qualifying Microsoft 365 Business base license. All three plans are capped at 300 seats and include Copilot as an optional add-on:
Business Basic provides cloud-only access: Teams, Exchange, OneDrive, SharePoint, Bookings, and web versions of Office. Business Standard adds full desktop Office apps (Word, Excel, PowerPoint, Outlook, Loop, Clipchamp). Business Premium adds Intune, Entra ID, Purview Info Protection, Azure Virtual Desktop, and Microsoft Defender on top of Standard — the recommended foundation for any business taking security seriously.
Copilot Business requires an M365 Business SKU as a pre-requisite. You cannot buy Copilot in isolation — the base plan must come first.
2. Copilot License Tiers Explained
Microsoft sells three distinct Copilot products with different capabilities and price points:
Tier 1 — Copilot Chat (Free + Metered)
Entry-level. Web-grounded AI chat within Microsoft's secure environment, Copilot in select M365 apps, and AI agents on a metered pay-per-use basis. Great for testing AI with no per-user monthly commitment.
Tier 2 — Microsoft 365 Copilot — $30/user/month
The full enterprise product. Connects to your actual business data (emails, SharePoint, Teams chats) and brings deep AI integration across all M365 apps, plus Copilot Studio for agent creation. Supports 1–9,999 seats.
Tier 3 — Microsoft 365 Copilot Business — $21/user/month
Purpose-built for SMBs under 300 users. Same core AI capabilities as enterprise Copilot, optimized for small business needs, and priced $9/user/month lower. Requires an M365 Business SKU.
M365 Copilot ($30) = enterprise, no SMB seat restriction. Copilot Business ($21) = SMB only, requires Business SKU, 300-seat cap. Make sure you're buying the right one.
| Feature | Copilot Chat | M365 Copilot ($30) | Copilot Business ($21) |
|---|---|---|---|
| Web-grounded AI chat | ✔ | ✔ | ✔ |
| Business data grounded AI | ✘ | ✔ | ✔ |
| In-app Copilot (Word, Excel, etc.) | ✘ | ✔ | ✔ |
| Copilot Studio agent creation | ✘ | ✔ | ✘ |
| Enterprise-grade security | ✔ | ✔ | ✔ |
| Seat cap | None | 9,999 | 300 |
| Requires Business SKU | No | No | Yes |
3. Copilot Bundles: The Smart Purchase
Available from December 1, 2025, these bundles combine a Business base plan with Copilot Business in one SKU — simpler billing, promotional savings built in:
The Business Premium + Copilot Business is Microsoft's flagship "Hero Offer" for 2026 — covering enterprise productivity, comprehensive security, and full AI in one clean package for SMBs.
One license, one bill, one renewal date. Bundles also qualify for CSP promotional discounts — bringing the Premium + Copilot bundle down to $32/user/month (promo, valid through June 30, 2026).
4. Security Add-ons: Defender & Purview Suites
For businesses needing advanced threat protection or data compliance on top of Business Premium, two SMB-targeted add-on suites are available:
Defender Suite for Business Premium
- Defender for Office 365 Plan 2
- Defender for Cloud Apps
- Microsoft Entra ID P2
- Defender for Identity
- Defender for Endpoint P2
- Defender for IoT (EIoT)*
Purview Suite for Business Premium
- M365 E5 eDiscovery & Audit
- M365 E5 Insider Risk Management
- M365 E5 Info Protection & Governance
Both suites together: Defender + Purview Bundle — $15/user/month. Only available on top of M365 Business Premium.
M365 Business Premium + Copilot Business + Purview Suite = $37/user/month (promo). Advanced security, compliance, and full AI productivity in one solution — the "Hero Offer" for partners.
5. Live CSP Promotional Pricing ACT NOW
As of February 2026, these promos are active — most expire June 30, 2026:
| Product | ERP | Promo Price | Discount | Min Seats | Expires |
|---|---|---|---|---|---|
| M365 Copilot (enterprise) | $30 | $25.50 | 15% off | 10+ | Jun 30, 2026 |
| M365 Copilot (enterprise) | $30 | $24 | 20% off | 100+ | Jun 30, 2026 |
| M365 Copilot 🆕 | $30 | $21 | 30% off | 300+ | Jun 30, 2026 |
| M365 Copilot (targeted) | $30 | $18 | 40% off¹ | 1500+ | Jun 30, 2026 |
| M365 Copilot Business | $21 | $18 | ~15% off | 1–300 | Jun 30, 2026 |
| Business Standard + Copilot | $33.50 | $22 | ~35% off | 10–300 | Jun 30, 2026 |
| Business Premium + Copilot | $43 | $32 | ~25% off | 10–300 | Jun 30, 2026 |
¹ 40% targeted offer for customers meeting specific eligibility requirements.
Enterprise Copilot customers with 300+ seats now get $21/user/month — matching Copilot Business price, but with no SMB restrictions. This promo runs Feb 19 – Jun 30, 2026.
6. Billing Options: Annual vs Monthly
Starting March 1, 2026, Microsoft introduces monthly/monthly billing for Copilot Business and all Bundles — 20% more than annual pricing, but with full flexibility:
| Billing Term | Copilot Business | Basic + Copilot | Standard + Copilot | Premium + Copilot |
|---|---|---|---|---|
| Annual / Annual | $21.00 | $27.00 | $33.50 | $43.00 |
| Annual / Monthly (+5%) | $22.50 | $28.35 | $35.18 | $45.15 |
| Monthly / Monthly (+20%) NEW | $25.20 | $32.40 | $40.20 | $51.60 |
Monthly/monthly launches March 1, 2026 across all Business Copilot SKUs. Deal sizes remain 1–300 users for all Business plans.
7. Upgrade Paths for Existing Customers
Path A — Add AI to Your Current Plan
For customers not ready to change their base plan:
- Business Basic → Business Standard + Copilot: +$16/u/m
- Business Standard → Business Standard + Copilot: +$9.50/u/m (promo)
- Business Premium → Business Premium + Copilot: +$10/u/m (promo)
Path B — Security + AI (The Hero Motion)
- Business Standard → Premium + Copilot + Purview: +$25/u/m
- Business Premium → Premium + Copilot + Purview: +$15/u/m
"Unlock AI-powered productivity for just $10 more per user/month — for a limited time." Use this with existing Business Premium customers ahead of their renewal window.
8. Which License Is Right for You?
| Your Situation | Best Path | Cost/User/Month |
|---|---|---|
| Starting out, budget-focused | Business Basic | $6 |
| Need desktop apps + AI | Business Standard + Copilot Bundle | $22 (promo) |
| Want AI + best SMB security | Business Premium + Copilot Bundle | $32 (promo) |
| Need compliance too | Premium + Copilot + Purview Suite | $37 (promo) |
| Enterprise, 300+ seats | M365 Copilot (30% promo) | $21 |
| Enterprise, 1,500+ seats | M365 Copilot (targeted 40% off) | $18 |
Customers who lock in annual/annual billing before June 30 lock in the promotional rate for their entire annual term. After that, prices revert to ERP.
