Licensing isn’t the most exciting topic in technology — until it becomes the reason innovation is blocked. For many organisations, Copilot Studio licensing has been that blocker.

While the per-user licensing model for Microsoft 365 Copilot was straightforward, around $40 per user per month for productivity enhancements in Word, Excel, Outlook, PowerPoint, and Teams, the licensing for custom Copilot Studio agents was far less clear.

The Old Model: “Messages” and Missed Opportunities

Until recently, custom Copilot Studio solutions were governed by a message-based licensing system. Depending on how complex the request was and where the knowledge was sourced, a single interaction might cost:

• 10 messages
• 20 messages
• 50 messages
• …or even 100 messages.

This created real confusion:

• How could a business predict consumption costs?
• Would the ROI justify experimentation with custom agents?
• Was it better to stick to the productivity gains of Microsoft 365 Copilot and delay broader adoption?

The result was that many clients chose to maximise out-of-the-box Copilot in Office apps while holding back from the real business transformation potential of Copilot Studio.

The New Model: Copilot Credits

On September 1, 2025, Microsoft simplified the entire approach.

The common currency is no longer “messages” but Copilot Credits.

At first glance, this may seem like a simple name change, but the fine print makes all the difference. Here’s what you need to know:

1. Microsoft 365 Copilot per-user licensing now includes more Copilot Studio functionality.
2. Pay-as-you-go (PAYG) is still available, and often cheaper.
3. No change in prepaid pack quantity or PAYG rates.

Why This Matters: The Business “Why”

This licensing shift is more than an administrative tweak. It unlocks a new phase of Copilot adoption and ROI.

• Lower Barriers to Entry Businesses no longer need to do complicated “message math.” If you already have Microsoft 365 Copilot, you can extend into Copilot Studio without worrying about immediate extra charges.
• Encourages Experimentation and Innovation Teams can now try building custom Copilots to solve business-specific challenges. Instead of staying locked in personal productivity, organisations can begin exploring industry- or department-specific use cases.
• Better Cost Alignment Organisations can choose the model that best matches their workforce:
• Strategic ROI Path By aligning licensing with business need, leaders can justify custom AI investment with much clearer outcomes and cost control.

What This Means in Practice

Let’s look at a few scenarios:

• Finance Team → already licensed with Microsoft 365 Copilot, they can now create a custom Copilot in Copilot Studio to handle invoice queries or financial policy FAQs without extra charges.
• Customer Support → instead of licensing all agents with Microsoft 365 Copilot, the team can use PAYG for specific high-volume workflows, paying cents per interaction rather than full per-user licenses.
• Operations → can experiment with Agent Flows to automate approvals or logistics queries, without needing to justify new licensing upfront.
• Field Service → dont really use the knowledge apps, so skip the per user Microsoft 365 Copilot licensing, and pay a low $100 a month consumption price for hundreds of field workers to use the FAQ procedures agent

The Bottom Line

If your organisation already has Microsoft 365 Copilot licensing, you can now take advantage of Copilot Studio’s customisation tools at no additional cost.

This change removes one of the biggest barriers to innovation and clears the path for businesses to:

• Innovate with custom Copilot agents.
• Scale adoption across departments with clearer cost models.
• Achieve stronger ROI from AI investments.

It’s a strong signal from Microsoft that they’re listening to business concerns and actively working to make AI adoption simpler, more transparent, and more valuable.

📖 For the official details: Microsoft Copilot Studio licensing update