Microsoft is adding a new top-end Office 365 tier called E7 that bundles Copilot AI directly into the subscription, according to a CNBC report. The move creates a higher price point above the existing E5 tier, which currently tops out the enterprise licensing stack.
The strategy is clear: instead of selling Copilot as a separate $30-per-user-per-month add-on (which many IT departments have been slow to approve as a standalone expense), Microsoft is folding it into a premium bundle. It is the same playbook the company used to drive Teams adoption years ago - make the AI assistant part of the package rather than an extra line item that needs its own budget approval.
This matters because Copilot adoption has been slower than Microsoft projected. Many enterprises bought pilot licenses, tested them, and did not expand. A bundled tier removes the friction of a separate purchasing decision, even if the total cost is higher. The bet is that once Copilot is included by default for E7 customers, usage will grow organically as employees discover it in their existing tools.
For small businesses and freelancers on lower Office tiers, nothing changes immediately. The E7 tier targets large enterprises with deep Microsoft commitments. But the pricing signal is worth watching - if Microsoft needs a new tier to move Copilot licenses, it suggests the "AI as add-on" model has not been converting at the rate they wanted. Bundling is often what companies do when standalone demand disappoints.