Understanding the Cost Implications of Microsoft Copilot+ PCs

By NPI
July 09, 2024
Tags
IT Microsoft

Interested in learning more about NPI’s services?

Contact Us

One of Bill Gates’s first emails to the newly formed Microsoft included an aspirational goal of “a computer on every desk and in every home.” That ambitious vision led Microsoft for the first forty years of its existence. With new leadership comes new visions, though, and Satya Nadella recently stated, “We are the Copilot company. We believe in a future where there will be a Copilot for everyone and everything you do.”

Microsoft has certainly taken this latest vision to heart, promoting Copilot quite aggressively. The software giant’s goal is loud and clear: to “deliver Copilot in Windows to every employee, across any device.

One way that Microsoft wants to make Copilot an enterprise reality is to work with industry partners to deliver new PCs with Copilot technology built into the hardware by including a special Neural Processing Unit to provide the horsepower to support AI at the desktop. June 18th was the launch date for both Microsoft’s own Copilot+ PCs and offerings from third parties.  The pricing on these new devices is similar to the “Copilot free” versions, and that’s likely a good thing for Microsoft as we anticipate the new normal will be a Copilot+ PC moving forward.

Another Way to Increase Azure Spend

So, why a blog post if this is a good thing? That’s a good question.

We’ve previously written about the not-so-obvious dependencies with Copilot. It’s debatable whether the productivity gains users may experience with Copilot will turn out to be real – there are only so many ways you can dress up a PowerPoint or create nice charts with Excel. One could argue that an advanced Office class for your power users might be less expensive than buying Copilot for M365 for everyone (at $30 per user per month).

Of course, the real benefit to Copilot is using the Large Language Model so that Copilot can provide informed opinions about your data – meaning your data needs to reside somewhere where Copilot can find it. Think about that for a moment and consider what your Azure spend may look like after enterprise-wide adoption of Copilot.

Enterprise Cost Considerations for Microsoft Copilot+ PCs

It seems there’s a Copilot for everything – Copilot for M365, M365 Copilot Sales, M365 Copilot Services, Copilot Studio Subscription, GitHub Copilot for Business, GitHub Copilot for Enterprise, and now – Copilot+ hardware. In agreement with Satya, Microsoft is undoubtedly the Copilot company.

In negotiating with Microsoft, you should ask yourself whether the Copilot functionality is something you believe should be included in your existing licenses, or something that qualifies to be considered a for-fee enhancement. Said another way, Microsoft is monetizing the next generation of products by including Copilot – and in a way that will challenge enterprise budgets.

We all expect software to continue to get better, faster, and more sophisticated, and to some degree that is competitive table stakes. Time will tell how the economics of this new vision will play out.

It’s too early to tell whether Microsoft will sell their new Copilot+ PCs to large enterprises, although most sales teams at Microsoft have had Surface quotas for years. We speculate that Microsoft will incentivize its enterprise customers to purchase the new AI-enabled hardware.

To learn more about NPI’s Microsoft cost and licensing optimization services, contact us.

RELATED CONTENT