What is Microsoft Copilot? A plain explanation for business
Microsoft Copilot is an AI assistant built into Microsoft products. The reason the question keeps getting asked is that Microsoft has attached the name to several genuinely different products, so two people can both say "we are looking at Copilot" and mean completely different purchases.
What you need to know
- Copilot is a brand, not a product. At least five different things carry the name and they are not interchangeable.
- Most businesses asking about "Copilot" mean Microsoft 365 Copilot, the one inside Word, Excel, Outlook and Teams.
- It is licensed per user per month on top of your existing Microsoft 365 subscription, not included in it.
- Its real advantage is that it can see your own documents and email. That is also the reason to audit your file permissions before rolling it out.
By Daniellle Bhatt · Updated 31 August 2026 · Plain text
Where this comes from: The first ten minutes of most client conversations about Copilot are spent establishing which Copilot they mean. Microsoft has applied the name to at least five separate products with different prices and different capabilities, and the confusion is not the client's fault.
The five things called Copilot
| Product | What it is | Who it is for |
|---|---|---|
| Microsoft 365 Copilot | AI inside Word, Excel, Outlook, Teams and PowerPoint, with access to your own files and email. | Most businesses. This is almost certainly the one you mean. |
| Copilot (free web chat) | A general chat assistant at copilot.microsoft.com, comparable to free ChatGPT. | Individuals. Not a business deployment. |
| GitHub Copilot | Code completion and chat inside a developer's editor. | Software teams only. |
| Copilot Studio | A builder for custom copilots and agents on your own data. | Businesses building internal assistants. |
| Security and Dynamics Copilots | Role-specific assistants inside Microsoft's security and business-application products. | Teams already using those products. |
If a vendor or a colleague says "Copilot" without qualifying it, ask which one. The difference between the free web chat and Microsoft 365 Copilot is the difference between nothing and a per-seat annual commitment.
What Microsoft 365 Copilot actually does
The connecting thread is that it can see your organisation's content. That is the entire product. A general assistant can write you a good email; Copilot can write you a good reply to this email, referencing the attachment and last quarter's report, without you assembling any of it.
- Word: drafts and rewrites, working from documents already in your organisation.
- Outlook: summarises long threads and drafts replies with the thread as context.
- Excel: analyses and explains data in the actual workbook, and writes formulas.
- Teams: meeting recaps, action items, and catching up on a call you missed.
- PowerPoint: builds a deck from an existing document rather than from a blank slide.
What it is not good at
Writing from nothing. With no source material to work from, output is competent and unremarkable, and both ChatGPT and Claude do it better.
Anything outside Microsoft. The advantage is proximity to your data, and it evaporates the moment the work lives in another system.
Careful long-document reasoning. For contract analysis or work needing sustained attention across a large document, Claude is the stronger tool, which we cover in Claude vs ChatGPT for business.
The permissions problem nobody warns you about
Copilot respects the file permissions already set in your tenancy. That sounds like pure reassurance and it is also the biggest practical risk in a rollout.
Most organisations have documents that are technically accessible to far more people than intended, and are safe only because nobody could find them. Copilot is very good at finding things. Salary spreadsheets and board papers sitting in an over-shared folder become discoverable by asking a question in plain English.
Audit your permissions before you roll out, not after. In several deployments we have seen, this turned into the more valuable half of the project.
Copilot does not break your permissions. It reveals that they were already broken, which is a far better problem to find on purpose than by accident.
Is it worth it?
For document-heavy and meeting-heavy roles, frequently yes. For roles that rarely touch Office, frequently not, and that is the split to plan around rather than buying for everyone.
Run a pilot of ten to fifteen people in the right roles for a month, and measure hours saved rather than enthusiasm. Then expand only to the roles where it demonstrably worked.
If you want the comparison against the alternatives, Copilot vs ChatGPT covers it in detail.
Sources
- 1. Microsoft 365 Copilot , Microsoft
- 2. Microsoft 365 Copilot documentation , Microsoft Learn
- 3. ChatGPT , OpenAI
- 4. Claude , Anthropic
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