Technology
Wednesday, November 1st, 2023 2:08 pm EDT
Key Points
- Microsoft has launched its Microsoft 365 Copilot artificial intelligence add-on for Office app subscriptions aimed at businesses. This feature, integrated into applications like Word and Excel, is priced at $30 per person per month and has the potential to generate over $10 billion in annualized revenue by 2026, according to Piper Sandler analysts.
- Microsoft is leveraging its dominant position in the productivity software market to introduce Copilot, while Google is also competing by offering the Duet AI enhancement for subscriptions to its Workspace tools. Piper Sandler assumes that 18% of eligible users will use Copilot, attributing this potential adoption rate to a “fear of missing out” (FOMO) element.
- Microsoft’s strategy with Copilot has been to target large companies initially, with 40% of Fortune 100 firms already using it in an invitation-only paid early-access program. However, the challenge for Microsoft lies in expanding Copilot’s adoption beyond a small core of users to achieve wide deployment. The tool’s potential benefits to prioritizing emails and understanding documents may appeal to high-ranking executives, but it may also pose challenges for tech support. Additionally, Microsoft could benefit from increased usage of Azure cloud services as companies integrate Copilot.
Microsoft has introduced the Microsoft 365 Copilot artificial intelligence add-on for its Office app subscriptions aimed at businesses, priced at $30 per person per month. Analysts at Piper Sandler estimate that this could generate over $10 billion in annualized revenue by 2026. Microsoft seeks to capitalize on its dominant position in the productivity software market, where it faces competition from Google, which is offering the Duet AI enhancement for its Workspace tools. While the adoption rate of Copilot remains uncertain, the fear of missing out (FOMO) could drive businesses to embrace it. Microsoft has already seen significant adoption of Copilot by large companies, including Fortune 100 firms. However, it will be essential for Microsoft to extend its reach beyond early adopters to ensure widespread deployment. The tool’s potential to prioritize emails and understand documents could appeal to executives, but it may also pose challenges for tech support. Companies need at least 300 licenses for employee access to Copilot. Additionally, Microsoft may benefit from increased usage of Azure cloud services as companies integrate Copilot.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/01/microsoft-365-copilot-becomes-generally-available.html
