Agents are forming a big part of AI these days, bringing the promise of highly capable assistants with gen AI intelligence and the ability to use tools, data, and apps in multi-step processes. One of Microsoft's big moves recently is to allow agents to be used in the free version of Copilot (Microsoft 365 Copilot chat) by any employee with a Microsoft 365 licence - in other words, no need for the circa £24 per user per month "full fat" Microsoft 365 Copilot licence. In this approach, the AI usage is simply charged based on consumption in a pay as you go manner, thus avoiding the need to licence the entire organisation with Microsoft 365 Copilot.
However, understanding likely costs can be challenging - it's a common area of confusion for our clients. Copilot Studio agents will be the most popular since they represent the "low code" way of creating agents, opening the possibility of business users creating or enhancing agents without coding knowledge. In this post, we share an Excel calculator which can be used to forecast costs. Numbers are in US dollars for now due to how Microsoft publish pricing, here's a snip of what the calculator looks like:
To understand the context, there are some important fundamentals to know. Let's go into those
Agent costs - and the relationship with Microsoft 365 Copilot
To avoid doubling up of costs, agents are largely free for any employees licenced with Microsoft 365 Copilot - you're already paying for full Copilot licence for these folks after all, so most agent actions are free for these users. Not all actions, however - here's a summary:
- Users without a Microsoft 365 Copilot licence - all actions within an agent count as 'consumption'
- Users with a Microsoft 365 Copilot licence - most actions are free, but the exception is 'autonomous actions' which use generative AI to make decisions on how to process
So even before we get to the detail, that's a wrinkle which adds some complexity to predicting costs. Will you (or the business) create agents which rely on autonomous actions? That's hard to say without getting close to use cases and agent design. Unfortunately there's no way to prevent this type of action being used, so even if your organisation licenses lots of users with full Microsoft 365 Copilot, you may still incur AI agent costs.
For the purposes of simplicity, this article (and the linked Excel calculator) will focus on forecasting costs for users without a Microsoft 365 Copilot licence - in other words, the "free Microsoft 365 Copilot chat + Copilot Studio agents" combo. Lots of organisations are interested in this since organisational use cases get unlocked, potentially with a simpler investment case. If your organisation has lots of Microsoft 365 Copilot licensed users and you think agents using autonomous actions will be created by the business (there's no way to stop this currently), layering in these additional costs to the linked Excel calculator would certainly be possible.
How many agents will I have?
This is variable of course, but let's say that HR create three to five agents based on company policies, employee onboarding, hiring, and one or two other processes. Finance may create several for expenses, new client set-up, month-end processes, and invoice checks. Marketing may create some for events, content publishing, brand assets, and more. Legal, sales, engineering, customer service, and other functions may also create agents to help provide information and automate some elements of processes. Because agents are "focused AI", it's very much expected that an organisation ends up with many, not just a handful.
Copilot Studio pricing and message burn rates
Copilot Studio agent usage is charged in 'messages' based on complexity of the action. You have two ways of paying for these:
- Pay as you go - no upfront commitment, $0.01 per message
- Buy a message pack - 25,000 messages per month, also $0.01 per message
Regardless of how you pay, the key element is the 'burn rate' of different actions your agents may use. Microsoft has published this table to explain how different agent actions consume messages and the calculator uses these costs. However, remember from the earlier note, employees without a Copilot licence will be charged for all actions in this list, and even employees with a full Microsoft 365 Copilot licence will incur costs if autonomous actions are used.
Let's look at some scenarios.
Calculating agent costs
If we make some assumptions on a typical agent and usages per day (conversations), here are some headline figures (in USD because that's how Microsoft publish pricing):
➡️Scenario 1 - 10 agents, each with 30 conversations per day: $30,096 per year
➡️Scenario 2 - 30 agents, each with 30 conversations per day: $90,288 per year (as shown in the image above)
Both of these costs typically come as a surprise to our clients!
We can debate exactly what the right inputs and variables should be for your business (and we should, because the inputs used will influence the costs heavily) - but clearly there is something significant to perform diligence on here, and it's not apparent to most. Anyone thinking of using agents without "full" Copilot licensing across the board needs to look at this closely - but it won't necessarily come through in the Microsoft documentation, some cost modelling is required.
We're providing the Excel calculator for download here, but we at Advania can help with this - and of course, the broader aspects of making the right choices in AI.
Just get in touch if a conversation is useful.
P.S. To dive even deeper into this, check this other blog:
Copilot Studio agent cost calculator - a tool to help forecast costs