Microsoft Copilot: free chat versus the Microsoft 365 business add-on

Free web chat versus licensed Microsoft 365 Copilot

The free version operates as a web chatbot with internet access and GPT-4 knowledge. It cannot see internal documents, emails or spreadsheets. The business Copilot for Microsoft 365 is a licensed add-on that connects to the organisation’s tenant. It reads files on SharePoint, OneDrive and in Exchange, respects the configured access rights, and generates answers in the context of the user’s work. If a user has no permission to open a contract on SharePoint, Copilot will not read it and will not use it for an answer.

Capabilities inside Word, Excel, Outlook and Teams

In Word, Copilot drafts a first version of text based on snippets from other documents, condenses long reports into summaries, or rewrites the style from formal to more conversational. In Excel, it helps with formulas, creates pivot tables and charts from a natural-language prompt such as “create a summary of revenue by region for Q1”. In Outlook, it summarises long email threads, suggests replies and prepares follow-up steps. In Teams, after a meeting it produces a transcript with action items, decisions and citations of specific speakers.

Data governance: Copilot sees only what the signed-in user can see

Organisations often expect Copilot to “know everything”. In practice it sees only what the signed-in user sees. If an accountant has access to payment orders and a marketing manager does not, Copilot shows the payment orders to the accountant but not to the marketing manager. Audits by CIAD show that misconfigured sharing on SharePoint, for example “Anyone with the link”, causes sensitive data to flow unintentionally into generated answers. Before deployment, a permissions audit and the configuration of sensitivity labels are necessary.

Licensing, deployment and what the unlicensed user sees

An organisation buys the Copilot for Microsoft 365 licence as an add-on to an existing E3, E5 or Business Standard or Business Premium subscription. It is not included in the standard bundles. Deployment occurs in the Microsoft 365 admin centre, where the administrator assigns licences to specific users or groups. Without a licence, a user sees only the free web icon in the applications; that icon does not communicate with corporate data.

Decision framework

Choose the free web chat when you need only a general-purpose assistant on the internet. Choose the licensed Copilot when you need an assistant that works with your internal data inside Office applications and enforces your organisational security model.