Microsoft is reportedly working on a new Microsoft 365 subscription, informally called E7, which bundles Copilot and AI agent management. AI agents would then effectively be priced as digital employees. In exchange, they would receive identities, email accounts, and Teams access. In total, an E7 license would cost $99 per month.
This is according to analyst Mary Jo Foley of Directions on Microsoft. The plan bundles Microsoft 365 Copilot and Agent 365. The latter set of features appeared in November as a preview for the management and governance of AI agents in enterprise environments. There would also be other unknown components at the “E7” level that are still missing from E5.
First change in ten years
The idea behind this is pragmatic: AI agents can be priced as if they were digital employees. They need identities, email accounts, Teams access, and policy controls. In addition, they use resources that cannot be fully predicted due to the non-deterministic nature of AI. These are all things that are currently linked to user licenses, but that seems far from optimal. Microsoft 365 E5 plus Copilot already covers most of this, but E7 would combine these elements into a single SKU.
The reason the current setup is immature is because AI agents do not work like humans or applications. An intermediate form is required, and not one that hooks into service accounts or an existing identity. It seems to be reason enough for Microsoft to introduce a new subscription level for the first time in ten years. The most recent addition was E5 in 2015, which surpassed the functionality of E4 with stronger security measures, new ways to make video calls, and improved analytics.
Although AI functionality already had a separate price tag via Copilot subscriptions, this is not the right way to drive adoption in the long term. Months ago, it became clear that Copilot was difficult to sell. Alternative AI services are about the same price for professional versions and also offer freedom of choice. Microsoft naturally hopes to capitalize on the central functionality that 365 brings, with a deeply integrated Copilot offering advantages that external tooling lacks. By providing a separate license with benefits on top of AI functionality, E7 could well be a success. Whether users will consider it desirable that unrelated features may come at a higher price is yet to be seen.
Digital employees cost money
What remains unclear is whether agents are actually countable. After all, it makes sense for organizations to group certain AI functionality under one ‘agent’, as far as possible, to avoid having to pay multiple times for each agent. Given the flexible deployment of agents by tooling such as MCP, it is logical to expect an arms race to build as few ‘digital employees’ as possible for as many AI features as possible.
The expected price is therefore around $99 per month per agent. That is not far from what you already pay for E5 and Copilot combined: from July 1, 2026, E5 will cost $60 per user per month, an increase from the current $57. Microsoft 365 Copilot adds another $30 per month.
E7 not only appeals to customers who want less administrative hassle, but also offers Microsoft a foothold. AI agents already require a Microsoft 365 Copilot license for features such as document analysis in OneDrive. With a separate agent licensing model, Microsoft formalizes and scales that dependency.
Microsoft remains silent for now
In addition to the ongoing Copilot integrations (Security Copilot is already bundled with M365 E5 as standard), E7 seems to be a way for Microsoft to deliver AI as a total package. Microsoft’s own spokespersons have already indicated that they expect agents in business environments to be licensed in a similar way to human employees, according to Foley.
Microsoft has not yet responded substantively to questions about E7 from The Register. The price increases as of July 1, 2026, have already been finalized.
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