Microsoft M365 Copilot: A Forecast of Adoption and Impact

I’ve been talking to Microsoft partners and early adopters about M365 Copilot for weeks now. Here’s what I’m hearing, and what I think it means.

Everyone agrees it’s valuable

Even the sceptics. The most conservative adoption predictions I’ve seen sit around 5-10%, which still represents a significant revenue boost for Microsoft. Most experts I’ve spoken with expect something closer to 2% adoption by the end of this year, 10% by the end of 2024, and 35% by the end of 2025.

If those numbers hold, Copilot will be as consequential as the original O365 rollout or the Teams explosion during the pandemic.

Early signs are promising

Several Microsoft partners and clients in the Early Adopters programme are running pilots, with more planning to start in the coming months. Among those trialling Copilot, conversion rates to paid licences are high. The product genuinely impresses people who use it.

But there’s a catch. The minimum deployment threshold of 300 users locks out smaller organisations entirely. Microsoft clearly wants enterprise customers first.

The pricing problem

Nobody I’ve spoken with thinks $30 per user per month is reasonable. The consensus “fair price” hovers around $16.

Consider what the current pricing actually means: adding Copilot increases the cost of an E5 licence (opens in new tab) by roughly 50%. For E3, it’s over 80%. And Microsoft isn’t negotiating.

With expected price increases in 2024 and the Teams licensing changes in Europe (opens in new tab), organisations should prepare for substantial rises in their Microsoft spending. Copilot adoption decisions won’t happen in isolation.

Security comes first

Every conversation I’ve had circles back to security. Before rolling out Copilot widely, organisations need comprehensive security audits and proper access controls. The technology is powerful, which means the risks of exposing sensitive data are real.

Regulatory compliance adds another layer of complexity. I expect security concerns to slow adoption more than pricing does, at least initially.

Where this goes

Copilot’s capabilities are genuine. So are the challenges around cost and security. The organisations that adopt early will be those with mature security postures and budgets that can absorb the premium pricing.

For everyone else, waiting makes sense. Microsoft will eventually face pressure to lower prices or offer more flexible licensing. They always do.