Microsoft 365 Copilot

Microsoft 365 Copilot is the AI experience embedded across the Microsoft 365 productivity suite: Word, Excel, PowerPoint, Outlook, Teams, OneNote, and the standalone Copilot app. It is distinct from the embedded Copilots inside Dynamics 365 (Copilot in Business Central, Copilot in Customer Service, etc.) and from Copilot for Sales. M365 Copilot is grounded in the user's M365 data through Microsoft Graph; Graph connectors can index external systems including Dynamics 365 for retrieval. Copilot Studio agents can extend M365 Copilot's behaviour with custom plugins. Licensed as a paid per-user add-on requiring an M365 base SKU.

In practice, the naming overlap between "Copilot" products causes most of the confusion: a customer asking "does our M365 Copilot licence include the Dynamics 365 AI features" is asking about two separately-licensed products that happen to share a brand name and, increasingly, some underlying technology. Copilot in Business Central or Copilot for Sales is licensed and enabled inside the Dynamics 365 app itself; M365 Copilot is a Microsoft 365 add-on and does not automatically surface inside Dynamics 365 apps, though a Graph connector can be configured to let M365 Copilot retrieve Dynamics 365 data when answering a Word or Teams query.

Where teams get this wrong most often: budgeting for "Copilot" as if it were one line item, when in practice a real Dynamics 365 plus Microsoft 365 estate typically has two or three separate Copilot-branded licences (the M365 add-on, the Dynamics 365 app-embedded Copilot, and potentially Copilot Studio for custom agents), each priced and enabled independently.