---
title: "Microsoft 365 Copilot: what it does and what it costs"
lang: en
type: knowledge
canonical: https://www.arocom.de/en/knowledge/ai/microsoft-copilot
alternate: https://www.arocom.de/wissen/ki/microsoft-copilot
author: "Axel Roth"
published: 2026-07-24
last_updated: 2026-08-24
---

# Microsoft 365 Copilot: what it does and what it costs

Microsoft 365 Copilot integrates AI directly into Word, Excel,
PowerPoint, Outlook, and Teams, drawing on the data in your own
Microsoft tenant. The licence costs about 28 EUR per user per month
on top of the Microsoft 365 licence. Data protection is
fundamentally solved (EU Data Boundary, no training on company
data) but demands configuration discipline, for example with flex
routing introduced in 2026. arocom assesses who Copilot pays off
for and where model-agnostic alternatives fit better.

## Microsoft 365 Copilot: AI in the Microsoft ecosystem

If you spend all day in Outlook, Teams, and Word, the most
convenient place to get AI is right where you already are.
That is exactly the promise of Microsoft 365 Copilot: no
additional tool, but AI as a feature in the programmes your
company already runs.

The flip side: Copilot ties you even deeper to Microsoft and
only knows the models Microsoft provides. For decision-makers,
a sober look at features, costs, and the privacy details is
worth it.

## What Microsoft 365 Copilot is

Copilot is the umbrella term for Microsoft's AI assistants.
What matters for businesses is Microsoft 365 Copilot: AI in
Word, Excel, PowerPoint, Outlook, and Teams, with access to
emails, documents, and chats in your own tenant. Copilot
summarises meetings, drafts documents, analyses spreadsheets,
and answers questions across your company data.

Add Copilot Studio for custom agents and, since 2026, features
like Work IQ, which factors in work context and preferences.
Under the hood run OpenAI models; since early 2026, Microsoft
supplements them with [Claude](https://www.arocom.de/en/knowledge/ai/claude) models
from Anthropic for selected features.

Important distinction: the free Copilot and Copilot Pro are
consumer products without enterprise data protection. For
company use, only the business licence counts.

## What Copilot costs

Microsoft 365 Copilot costs about 28 EUR per user per month on
top of the existing Microsoft 365 licence (as of July 2026).
A qualifying base licence is required, typically Business
Standard, Business Premium, E3, or E5.

With 100 employees, that is roughly 34,000 EUR per year on top
of the existing Microsoft costs. Agents and consumption-based
features are billed additionally via Copilot Credits. At the
same time, Microsoft is gradually folding Copilot into its
bundle prices, so the pricing structure is in flux.

For comparison: for multi-model platforms such as
[Langdock](https://www.arocom.de/en/knowledge/ai/langdock) the vendor quotes a list
price of 25.00 EUR per user per month excluding VAT for its
Business Standard plan (langdock.com, retrieved 7 August 2026),
without a Microsoft licence requirement, but also without the
deep Office integration.

## Data privacy: solved, but with pitfalls

The fundamentals are in place: company data stays in the
tenant, is not used to train public models, and the EU Data
Boundary contractually guarantees processing in Europe. The
Hessian data protection authority confirmed fundamental GDPR
compliance in a detailed report in late 2025.

Two points still demand attention.

Since April 2026, Microsoft may process AI requests in data centres outside
the EU during load peaks. The feature is called flex routing and is on by
default for new tenants. Anyone who has to adhere strictly to the EU Data
Boundary disables it in the Admin Center and adjusts the data protection
impact assessment.

The second point is permissions. Copilot sees everything the person asking
is allowed to see. Overly broad shares in SharePoint and Teams thus become
an AI problem: the assistant finds the salary document that never should
have been shared. So the permission model belongs before the rollout, not
after it.

We summarised the general criteria for legally sound AI use in
our article on
[GDPR-compliant AI use](https://www.arocom.de/en/knowledge/ai/gdpr-compliant-ai).

## Who Copilot pays off for

Copilot fits when the company is deep in the Microsoft ecosystem and AI is
mainly meant to speed up office work: meeting summaries, email drafts,
document analysis. As long as that workflow consists of Microsoft tools,
the integration is unmatched.

Something else fits better as soon as one of three conditions applies. When
model diversity matters: Copilot only knows Microsoft's own selection,
while platforms like [Langdock](https://www.arocom.de/en/knowledge/ai/langdock) bundle over 40
models from six providers by the vendor's own account. When dependency on
Microsoft is a strategic concern anyway. Or when AI should go into your own
product: for AI features in your own website or customer platform there is
no way around a direct [AI integration](https://www.arocom.de/en/services/ai-integration) via
model APIs, and Copilot is not built for that.

Here too: both can run in parallel. Copilot for internal
office work, a model-agnostic integration for your own
platform.

**Use AI beyond the Office suite?**

arocom advises vendor-independently on AI platforms and
integrates AI features directly into Drupal. Write to us for
a no-obligation conversation.

- [Request AI consulting](https://www.arocom.de/en/contact)

### What does Microsoft 365 Copilot cost?

About 28 EUR per user per month on top of the existing Microsoft 365 licence (as of July 2026). A qualifying base licence such as Business Standard, Business Premium, E3, or E5 is required. Agents and consumption-based features cost extra.

### Is Microsoft 365 Copilot GDPR-compliant?

Fundamentally yes. Company data stays in the tenant, is not used for model training, and the EU Data Boundary guarantees EU processing. Watch out for flex routing (on by default since April 2026), which can process requests outside the EU during load peaks, and for the permission model before rollout.

### What is the difference between Copilot and Copilot Pro?

The free Copilot and Copilot Pro are consumer products without a DPA and without enterprise data protection. For company use, only Microsoft 365 Copilot with a business licence is suitable, which keeps data in your own tenant.

### Which AI models does Copilot use?

Primarily OpenAI models, and since early 2026 also Claude models from Anthropic for selected features, each chosen by Microsoft. There is no free model choice as with multi-model platforms.

### What is flex routing and why does it matter?

Since April 2026, Microsoft may process AI requests in data centres outside the EU under high load, on by default for new tenants. Organisations with a strict EU requirement switch the option off in the Admin Center and update their data protection impact assessment.

### Does Copilot replace a custom AI integration?

No. Copilot speeds up internal office work. AI features in your own product or website, such as semantic search or editorial assistants, need a direct integration of the model APIs into the platform.

## Read more

- [Langdock](https://www.arocom.de/en/knowledge/ai/langdock): The multi-model alternative
- [GDPR-compliant AI use](https://www.arocom.de/en/knowledge/ai/gdpr-compliant-ai): The four core questions before rollout
- [AI vendors compared](https://www.arocom.de/en/knowledge/ai/openai): GPT, Claude, Gemini in detail
- [Claude by Anthropic](https://www.arocom.de/en/knowledge/ai/claude): In Copilot since 2026
- [AI integration as a service](https://www.arocom.de/en/services/ai-integration): What arocom concretely offers

## External resources

- [Microsoft 365 Copilot](https://www.microsoft.com/en-us/microsoft-365-copilot): Official product page
- [Copilot documentation](https://learn.microsoft.com/en-us/copilot/microsoft-365/): Technical reference for admins
- [arocon](https://arocon.eu): The consulting brand in the arocom family