Microsoft sees Copilot as a strategic investment, confident it will become a significant revenue stream in the long run. Wikimedia Commons

Microsoft has expressed confidence in its AI assistant, Copilot's ability to generate revenue in the long term. The company is sparing no effort to implement Copilot in its apps (Microsoft 365) and services (Windows OS). This push even includes limitations on uninstalling Copilot for some Windows 10 users.

While the feature-laden Copilot has multiple use cases, the monthly subscription cost of $30 (£23.45) per user might deter some from adopting the AI assistant. The high cost of AI implementation can be a major hurdle, especially for smaller businesses.

A recent Wall Street Journal report revealed concerns among early adopters of Copilot, who raised questions about the $30 (£23.45) per-user cost of the AI assistant. Microsoft defended Copilot's high price at the Morgan Stanley TMT Conference.

Microsoft's Jared Spataro, in conversation with Keith Weiss, a Wall Street analyst at Morgan Stanley, clarified that Copilot within Office products such as Excel is still in its early stages. He further remarked that it will soon become more comprehensible.

Does Copilot deliver on its promises?

"Copilot in Excel is still in early stages, and it's learning every day. Users have very high expectations, and they are expecting Copilot to become their financial analyst, but it's very far from the stage we're currently at as we're still learning the command surface of Excel and PowerPoint," noted Spataro, who is responsible for Copilot and Microsoft 365 apps at Microsoft.

Highlighting the inner workings of Copilot, Spataro mentioned the AI tool relies on several key components like data orchestration, large language models (LLMs), and specialised skills. Each of these areas is currently undergoing rapid advancements, not always in a straightforward manner.

In other words, you can expect significant improvements to Copilot in the coming months and years. Microsoft, the software giant headquartered in Redmond, Washington, promises further advancements for Copilot. These improvements streamline interactions, creating an experience Spataro describes as "magical."

Evaluating the value of Copilot for businesses

During their conversation, Spataro shared up to three key scenarios in which Microsoft can effectively justify the Copilot's steep price point:

Microsoft 365 Copilot: Microsoft 365's chat experience, powered by AI, seamlessly integrates with your emails, calendar, documents, and transcripts while acting as a chatbot. This ability goes beyond the capabilities of most human assistants.

Teams: Within Teams meetings, Copilot proves invaluable for summarising the discussions, following up, and providing additional information that emphasises essential points and actions.

Outlook: Outlook's Copilot feature simplifies long email threads and helps draft complex emails. This functionality is convenient when dealing with a high volume of emails.

"We are able to justify the price point quite well when we move over into those scenarios that I listed as our top three scenarios," Spataro added.

Microsoft sees Copilot's $30 monthly price tag as a substantial investment, particularly compared to existing Microsoft 365 subscriptions like E3 ($36) and E5 ($57). This price point has led many companies to carefully evaluate Copilot's value proposition and determine if they should invest in it.

Copilot is poised to be a lucrative venture

Microsoft actively collaborates with customers to evaluate Copilot's value proposition. The process includes analysing factors such as time saved through automation and the overall return on investment (ROI) compared to current workflows.

Jared, who expressed optimism for Copilot's future, said there is a need for user expectations to be grounded in reality. Microsoft believes Copilot will be a significant revenue stream in the long term.

"I would say my job here is to temper your expectations. Over the long term, we think this will be a great moneymaker for us. But don't think that it's breaking free of the normal deployment cycle, the normal evaluation cycle, the normal budget cycle associated with IT," Jared Spataro added.