Microsoft has unveiled a new top-tier Office subscription priced at $99 per user per month, bundling artificial intelligence capabilities with advanced security tools as the company attempts to accelerate adoption of its Copilot AI assistant.

The Microsoft 365 E7 package, launching on 1 May, includes the $30 Copilot AI add-on, $12 Entra identity tools and the new $15 Agent 365 product for managing companies’ AI agents. The bundle costs 65% more than the existing E5 subscription, which rises to $60 per month following upcoming price increases.

Judson Althoff, chief executive of Microsoft’s commercial business, told CNBC the launch should drive broader Copilot adoption and encourage organisations to upgrade more workers to E5. “The majority of our base is E5 now, right? And then we’re going through healthy renewal cycles on E5 right now. But E5 was created pre the agentic world,” Althoff said.

For customers purchasing E7 or standalone Copilot, Microsoft is introducing Copilot Cowork, developed through a partnership with AI model developer Anthropic. The feature handles multi-step tasks such as sending regularly scheduled emails to colleagues and preparing for meetings with documents and internal calls.

Copilot Cowork will become available as a research preview this month to clients enrolled in Microsoft’s Frontier programme, which provides early access to AI features. The launch comes after updates to Anthropic’s Claude Cowork service raised investor concerns that AI models could pose competitive threats to established software companies.

Growing productivity revenue remains a priority for Microsoft alongside expanding its cloud business. Microsoft 365 commercial products and cloud services represented 30% of the company’s total revenue in the December quarter. However, Microsoft has reported slowing growth in the number of subscriptions, with 365 commercial seats up 6% in the latest quarter.

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In January, Microsoft chief executive Satya Nadella said the company had 15 million Microsoft 365 Copilot paid seats, representing 3% of seats for commercial Microsoft 365 subscriptions. Microsoft has invested more than $100 billion in data centre infrastructure over the past year, including Nvidia chips that power AI models. Selling AI offerings represents one way to demonstrate return on that investment.

Alastair Woolcock, an analyst at technology industry researcher Gartner, said the inclusion of identity, management and security software in E7 is critical for helping large companies ensure they can safely distribute modern AI tools and increase productivity. “Nobody wants to buy a dozen different $20 a month products, right?” Woolcock said.

The E7 tier marks the first new Microsoft 365 licensing level for enterprises since the company launched E5 in 2015. Despite consistent pressure on customers to migrate to E5, uptake has been gradual. In 2022, the last time Microsoft publicly disclosed E5 subscriber counts, officials said 12% of its Office 365 and Microsoft 365 installed base were E5 subscribers.

Agent 365 isn’t a standalone product but rather a collection of capabilities drawn from existing Microsoft services, unified to manage how automated agents operate, access data and interact with enterprise systems. The framework supports agents built with Microsoft tools such as Copilot Studio, Microsoft Foundry, the M365 Agents Toolkit, the Agent Framework and the Agent 365 SDK.

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The service also supports agents built using third-party and open-source frameworks, and those running in partner clouds. Microsoft officials have indicated they expect agents, as they proliferate in enterprises, to need licensing similar to human employees, requiring Entra IDs, email accounts, OneDrive accounts and Teams accounts.

In a note to clients on Thursday, Jefferies analysts led by Brent Thill reiterated the firm’s buy rating on Microsoft stock after meeting with the company’s vice president of investor relations, Jonathan Neilson. Thill wrote that the company “emphasised growing conviction” that it is coming into a total addressable market-expansive movement in Microsoft 365, built on its roughly 450 million user base.

The E7 launch comes alongside broader Microsoft 365 commercial pricing increases taking effect on 1 July 2026. The flagship E5 tier will rise from $57 to $60 per month. These changes apply globally with local market adjustments, and non-profit pricing will be adjusted in line with commercial pricing.

Microsoft has also expanded the availability of AI, security and management capabilities across Microsoft 365 offerings. In the past year, the company released more than 1,100 features across Microsoft 365, Security, Copilot and SharePoint.

The company is adding enhanced email security features from Microsoft Defender for Office 365 Plan 1 to Office 365 E3 and Microsoft 365 E3 to help more organisations detect and protect against phishing, malware and malicious links across email and collaboration platforms.

Security Copilot agents are being built into the workflow for security teams using Microsoft Defender, Entra, Intune and Microsoft Purview. Security Copilot will roll out to all Microsoft 365 E5 customers in the coming months, with customers receiving a 30-day advance notice before activation.

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The E7 pricing strategy raises questions about Microsoft’s approach to monetising AI adoption. If priced at $99 per user per month, the new tier significantly exceeds the combined cost of E5 at $60 plus standalone Copilot at $30. However, the inclusion of Agent 365 and expanded Entra capabilities could justify the premium if organisations find value in consolidated agent management and governance.

For enterprises aggressively pursuing AI-driven workflows, the integrated model may streamline governance and deployment. Others may adopt a more selective approach, combining licence tiers or limiting AI-enabled seats to specific departments. The effectiveness of the strategy will depend on whether organisations view agent management as essential infrastructure worth premium pricing or as capabilities they can assemble more economically through existing tools.

Microsoft’s commercial business has yet to prove that Copilot adoption will accelerate sufficiently to justify the massive infrastructure investments the company has made. The E7 tier represents a significant bet that bundling AI capabilities with security and identity tools at a premium price point will appeal to enterprises ready to deploy AI agents at scale.