Copilot's add-on label comes off on 1 December: the per-seat step to E7

What changes on 1 December

Microsoft's partner announcements for October 2026 carry two dates. From 16 October the current Copilot offers include "(add-on)" in their names, so a quote line now reads Microsoft 365 Copilot (add-on). From 1 December, new Microsoft 365 Copilot and Copilot Business offers can be bought without a qualifying Microsoft 365 base subscription, across commercial, education, government and nonprofit customers. The new offers carry their own product and SKU IDs and are priced the same as the current offers.

The add-on offers reach end of sale in the Cloud Solution Provider channel on the same day. End of sale is not end of life: existing customers keep their product IDs, prices, renewal terms and seat quantities, and Microsoft states that no migration or licence reassignment is required. The change sits in how the seat is bought, not in what Copilot does.

One sentence in the announcement limits the standalone pitch. Copilot experiences continue to depend on the Microsoft 365 apps and services a customer is licensed for. A standalone seat is therefore a licence without the Word, Excel, Outlook and Teams surfaces that most of the product's daily value sits inside, which makes it a different purchase from the one most enterprises have modelled.

The two numbers every Copilot quote starts from

Microsoft 365 Copilot lists at $30.00 a user a month, paid yearly, and the enterprise pricing page still describes it as an add-on that requires a separate qualifying Microsoft 365 licence. That is the figure every Copilot business case has used, and it survives the December change.

The base plan is where the real step lives. Microsoft 365 E5 lists at $60.00 a user a month, paid yearly, so an E5 estate that adds Copilot reaches $90.00 a seat at list. E7 lists at $99.00 a user a month and, per Microsoft's plan page, includes Microsoft 365 E5, Microsoft 365 Copilot, Microsoft Agent 365 and the Microsoft Entra Suite in one subscription.

Put the two next to each other and the bundle step is $9.00 a seat a month. What Microsoft adds for that $9 is agent governance through Agent 365 and the identity suite that otherwise sits on a separate line, which is the part of the October change that actually moves a budget.

Three ways to buy the same assistant

The grid below prices three purchase paths at list for a 2,000-seat estate. Discounting is where enterprise agreements differ, but the list step is what a buyer has to justify internally. The standalone path is the new option and the cheapest line; it is also the one that leaves the office applications out.

The usage bill that rides with the seat

Seat price is only half of the forecast. The same October announcement makes usage-based billing the default for new Microsoft 365 Copilot Business licences bought through CSP from 1 December, with a default spending limit of 4,000 Copilot Credits per user per month that admins can adjust. A hundred Copilot Business users could consume up to 400,000 credits a month under that default, with charges based on actual usage.

The announcement names Copilot Cowork, Work IQ APIs and GitHub Copilot Harness as the experiences that draw on the meter. It also lists markets where the change will not initially be available: Australia, Belgium, Brazil, France, Germany, India, Italy, Korea, the Netherlands, Poland and Spain. A buyer in one of those markets is signing a different billing shape from the same SKU, which matters when a group negotiates one deal across several countries.

Why the bundle wins at 2,000 seats

At 2,000 seats, an E5 tenant adding Copilot commits $2,160,000 a year at list. The same tenant on E7 commits $2,376,000, or $216,000 more. That $216,000 buys Agent 365 and the Entra Suite for every seat, and it deletes two lines a procurement team would otherwise negotiate separately.

The comparison inverts for a tenant that has already bought identity governance elsewhere. E7's premium is only rational if the suite would have been bought anyway, because the bundle cannot be split at renewal. For an estate on E3 the jump is larger still: E7 carries E5-level security as well as Copilot, so the decision stops being about an AI assistant and becomes a security-tier upgrade with a Copilot line attached.

The standalone seat has one clean use. A population that needs chat and agents but does not work in Office, such as a plant floor or a contracted workforce, can now be licensed without buying E3 or E5 for every person. That is a narrower purchase than the announcement's framing suggests, and it is the one place where $30 is the whole price.

The decision rule

Buy standalone Copilot where the user needs the assistant and not the applications, and expect to buy E5 or E3 later for anyone who lives in Office. Buy E5 plus Copilot where the identity stack is already funded and no agent-governance requirement exists. Buy E7 where the same tenant would have bought the Entra Suite and agent controls anyway, because at list the bundle is cheaper than the parts and it removes a renewal negotiation.

Two dates belong in the renewal file. On 1 December the add-on name disappears for new purchases through CSP, which changes catalogue automation and any script that matches an offer name. On the same day the usage meter becomes the default for new Copilot Business seats. Neither changes the list price, and both change what the invoice looks like twelve months later.