Microsoft has finally confirmed that its AI-centric E7 subscription tier – where it licenses AI agent agents like employees – will debut on May 1 for an eye-watering $99 per user per month (pupm).
The E7 tier of Microsoft 365 is not unexpected – last week reports indicated an enterprise license bundling Copilot and agent management tools into one expensive package was on its way. Microsoft kept quiet until now.
Dubbed “the First Frontier Suite” by Microsoft, a company that never saw some hyperbole it didn’t like, E7 brings together the existing Microsoft 365 E5 subscription, with Microsoft 365 Copilot and Agent 365. Agent 365, a control plane for AI agents, is also due to hit general availability on May 1, and costs $15 per user per month. Add that, Copilot, and Microsoft 365 E5 together (along with the Entra suite, advanced Defender, and Purview), and E7 is “priced below purchasing these capabilities à la carte.”
However, Gartner crunched the numbers and found the E7 discount, compared to buying the elements “à la carte,” was not particularly impressive, coming in at 13.2 percent. The analyst said: “Bigger bundles should get bigger discounts,” and noted that larger discounts were on offer when comparing Microsoft 365 E3 and E5 to their component parts.
The consultancy was no more enthusiastic about Agent 365 itself, calling it “a work in progress with limited net new functionality to justify its $15 pupm price point.”
“Gartner believes organizations will find the value of ME7 to be questionable for the majority of knowledge workers today… Upgrading to the ME7 bundle for Agent 365 is not advised until Microsoft adds value.”
Enterprises must tread carefully and check their contracts, it added. “If ME7 and Agent 365 uptake do not meet its expectations, Microsoft could revise the offerings. Avoid nonreduction clauses that would prevent taking advantage of changes.”
It is not the rapturous response Microsoft might have hoped for. Judson Althoff, CEO of Microsoft’s Commercial Business, wrote: “Customers have told us E5 alone is no longer enough; they do not want multiple tools stitched together, they want one trusted solution.”
We asked Microsoft if it could provide evidence for Althoff’s assertion, but it has yet to respond. ®