- What Microsoft 365 Copilot is
- The versions of Microsoft 365 Copilot explained
- What Microsoft 365 Copilot does in each app
- How Microsoft 365 Copilot uses your work data
- Microsoft 365 Copilot privacy and security
- How to start using Microsoft 365 Copilot
- Microsoft 365 Copilot agents and Copilot Studio
- Is Microsoft 365 Copilot right for your business?
- Frequently asked questions
Microsoft 365 Copilot is Microsoft's AI assistant inside Word, Excel, PowerPoint, Outlook, Teams and the Copilot app. It drafts, summarises and analyses your work. The detail people miss: there are different versions, and only the Premium licence uses your organisation's emails and files automatically.
Microsoft has put the word Copilot on so many things that even IT people get muddled. There's a Copilot app, Copilot Chat, Copilot in Word and Excel, Copilot Studio and more. If you run a small business on Microsoft 365, the question you really want answered is simple: what do I get, and what does it do with my data?
This guide explains Microsoft 365 Copilot in plain English, using Microsoft's own documentation: the different versions, what it does in each app, how it handles your work information, and how to get started.
What Microsoft 365 Copilot is
Microsoft 365 Copilot is Microsoft's AI assistant for work. It sits inside the apps you already use, such as Word, Excel, PowerPoint, Outlook, OneNote and Teams, and in its own Copilot app. It's powered by large language models and, depending on your licence, it can draw on the web and on your organisation's own information.
Microsoft is clear that the experiences differ by three things: which data Copilot can draw on, how deeply it works inside the apps, and which licence you have. Whatever the version, Microsoft says access is scoped by each user's permissions, so Copilot shouldn't show you anything you couldn't already open.
The versions of Microsoft 365 Copilot explained
Microsoft's documentation describes a few levels. Here's my plain summary:
| Microsoft 365 Copilot version | What it can work with | Copilot in Word, Excel and PowerPoint |
|---|---|---|
| Copilot Chat (Basic) | Web data, plus files you upload or content open in Outlook and Teams | Not included |
| Microsoft 365 Copilot (Basic) | Web data, plus content you provide | Standard access, subject to capacity |
| Microsoft 365 Copilot (Premium) | Web data and your work data through Microsoft Graph and Work IQ | Full experience with priority access |
Copilot Chat (Basic) is included with eligible Microsoft 365 licences. Premium is an add-on licence your organisation adds for each person. For what's included in your own plan, check Microsoft's licensing page or ask whoever manages your Microsoft account.
What Microsoft 365 Copilot does in each app
- Word: draft, rewrite and summarise documents.
- Excel: analyse data, spot insights and create formulas and charts.
- PowerPoint: build presentations from a prompt or an existing document, summarise decks and apply formatting changes.
- Outlook: draft emails, summarise long threads and get coaching on clarity and tone.
- OneNote: draft plans, ideas and lists.
- Teams: summarise and transcribe meetings, and capture action items.
- Forms: draft questions for surveys and polls.
For a small team, the meeting summaries and email drafting are often the quickest wins. If you're thinking about where AI saves the most time, my guide to AI automation with real examples shows the kind of jobs that tend to save the most time.
How Microsoft 365 Copilot uses your work data
This is the bit that makes Premium different. With the Premium licence, Copilot can ground its answers in your organisation's information, such as emails, files, meetings, calendars and teams, through Microsoft Graph and a layer Microsoft calls Work IQ. You can point it at specific files, but you don't have to upload them.
With the Basic versions, Copilot mainly uses web data. You can still give it work content by uploading a file with your prompt or by using Copilot Chat alongside an open email or Teams conversation.
Microsoft 365 Copilot privacy and security
Microsoft says its Copilot experiences are covered by Enterprise Data Protection when you sign in with a work account, known as a Microsoft Entra account. In Microsoft's words, prompts and responses are protected by the same contractual terms customers already trust for their email in Exchange and files in SharePoint.
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- Sign in with your work account, not a personal Microsoft account, for work tasks.
- Tidy up file sharing first: Copilot respects permissions, so overshared files can surface in answers.
- Admins can manage Copilot features, agents, image creation and web search from Copilot controls in the admin centre.
- Read Microsoft's privacy pages for Copilot before using it with sensitive client information.
How to start using Microsoft 365 Copilot
- Sign in to Microsoft 365 with your work account.
- Open the Microsoft Copilot app, which Microsoft says replaces the Microsoft 365 Copilot app name, or look for the Copilot button in Word, Outlook or Teams.
- Check the label in the app to see which Copilot experience you have.
- Start with a low-risk task, such as summarising a long email thread or drafting meeting notes.
- Choose a model mode if you see one: Auto, Quick response for simple questions, or Think deeper for complex ones.
- Read and edit everything before you send or share it.
Microsoft 365 Copilot agents and Copilot Studio
Microsoft describes agents as focused versions of Copilot that can act as assistants and automate business processes, like a help desk or onboarding. Some agents are included with Copilot Chat, while others need extra set-up or licensing.
If you want to build your own, Microsoft Copilot Studio is the low-code tool for creating agents and connecting them to other data sources. It's a separate product from Microsoft 365 Copilot, so you don't need it to use Copilot in Word or Outlook.
Is Microsoft 365 Copilot right for your business?
If your team lives in Outlook, Teams and Word, Copilot fits neatly into your day. If you mostly use other tools, a standalone assistant may suit you better, and my roundup of AI tools for small business owners compares the main options. Either way, start with one or two people and one or two tasks, then expand.
If you'd like help rolling Copilot out sensibly, including tidying permissions and writing simple usage guidelines for your team, that's part of my work as an AI consultant.
Frequently asked questions
What is the difference between Copilot Chat and Microsoft 365 Copilot?
Copilot Chat (Basic) mainly uses web data and content you provide. Microsoft 365 Copilot (Premium) also uses your work data, like emails and files, and works fully inside Word, Excel and PowerPoint.
Is Microsoft 365 Copilot included with Microsoft 365?
Copilot Chat (Basic) is included with eligible Microsoft 365 licences. The Premium experience is an add-on licence, so check what your plan includes.
Does Microsoft 365 Copilot use my company data?
Only with the Premium licence does it automatically ground answers in your work data through Microsoft Graph and Work IQ, and only data each user already has permission to see.
Is Microsoft 365 Copilot secure?
Microsoft says Copilot is covered by Enterprise Data Protection when you sign in with a work account, with the same terms that cover Exchange email and SharePoint files.
Which apps does Microsoft 365 Copilot work in?
Microsoft lists Word, Excel, PowerPoint, Outlook, OneNote, Teams and Forms, plus the Microsoft Copilot app on web, desktop and mobile.
