Microsoft and Google Are Forcing Customers to Adopt AI at a Premium Price: What Customers Need to Know

Ai, data and $100 bills

As artificial intelligence (AI) continues to reshape the IT industry, massive and influential vendors like Microsoft and Google are now embedding their AI offerings into their already established and utilized product suites—at an additional steep cost.

Microsoft recently announced that its AI offering, Copilot, will now be included in its Microsoft 365 Personal and Family plans, now renamed “Microsoft 365 Copilot”. The subscription price for these consumer plans will go up $3 per month to $9.99 and $12.99, respectively. That means the annual costs have risen to $99.99 and $129.99, a steep bump for the 84 million paid subscribers out there.

Per the announcement, Microsoft’s Copilot AI assistant is being integrated into the core Microsoft 365 applications, providing customers the ability to create content with AI in Word, Excel, PowerPoint, Outlook, and OneNote. Microsoft Designer will also be added, which will allow consumer customers to be able to edit images and create new ones using AI. Microsoft does offer customers the option to downgrade to a Classic plan, which is essentially allowing the customer the ability to opt out of Copilot and the price increase.

Similarly, Google is integrating AI features into its Workspace applications, such as Gmail, at an additional $2 per month.

While these AI enhancements come with a promise of innovation and productivity improvement, they also raise an important question for customers: are these AI features really needed right now and will they actually be beneficial?

Why Microsoft and Google Are Adding AI Features

The motivation behind these changes is clear: revenue growth and market leadership. Microsoft 365 Copilot, which became available to enterprise customers back in 2023, has been a cornerstone of Microsoft’s push into AI. By forcing Copilot into consumers’ Microsoft 365 subscriptions, Microsoft very quickly found a way to drive Office consumer revenue growth. The potential revenue growth could be massive – upwards of $3B massive. Here is some quick math:

84 million customers x $36 (the annual increase per subscription) = $3,024,000,000

Even if Copilot is underutilized or not utilized at all, Microsoft can still claim widespread deployment among its user base for the customers who have “elected” to move forward with the non-classic subscription.

Google’s strategy follows a similar path. Integrating AI capabilities into Workspace applications ensures that it remains competitive with Microsoft through revenue growth and user adoption/usage. Despite these pushes towards more AI adoption, the reality is that many customers use only a fraction of the features available to them, raising doubts about whether the added cost is justified for the average user.

What Copilot Subscription Price Increases Means for Enterprise Customers

For now, Microsoft’s price increases through forced Copilot adoption is targeting Microsoft’s consumer customers only, but enterprise customers should take note. Based on Microsoft’s track record, especially for the enterprise customers UpperEdge supports, it’s highly likely that Copilot AI features will be added to enterprise subscriptions in the near future at a meaningful price increase.

I could even see Microsoft making mention of this as part of Satya’s opening remarks during Microsoft’s year-end earnings call in July 2025.

This development could have significant financial implications for businesses and their budgets, especially those with large-scale subscriptions. Enterprise customers must prepare for these changes now, rather than react later. Proactive planning will enable Microsoft’s enterprise customers to negotiate better terms and ensure they are only paying for features that deliver real value.

How Enterprises Can Prepare for AI Integration and Potential Copilot Subscription Price Increases

The first step for enterprise customers is to conduct a detailed analysis of their current product usage. Understanding which tools and features are actively used can help organizations identify areas of waste and opportunities for optimization.  For those enterprise customers that have not yet jumped on the “Copilot train,” start with what products are already in place and would be the go-forward foundation for any additional features.

For those enterprise customers that may already be in a Microsoft 365 Copilot “pilot” to some degree, it will be critically important to assess and understand what value is being obtained. Between this and the gathered utilization of the features in your Microsoft 365 suite, it will make it much more difficult for Microsoft to justify the price increase when they bring it to the negotiation table.

Enterprise customers should also ask for a meeting with their account executive to discuss the recent treatment of Microsoft’s consumer customers. Have the account executive speak to whether or not this should be something of concern for enterprise customers. Likely, the account executive will either not have an answer (they may not even be aware of the announcement) or they will say there is nothing to worry about. If there is nothing to worry about, make sure to get these assurances in writing.

The Bottom Line

Microsoft and Google’s inclusion of AI tools is part of a broader strategy to further monetize artificial intelligence and drive revenue growth. There is no question that these AI tools have the potential to enhance productivity and bring efficiencies, but they may not justify the additional cost for customers.

Both Microsoft and Google enterprise customers must act now to assess their current utilization, analyze their potential go-forward needs, and prepare for challenging negotiations. By taking these steps, businesses can ensure they are well-positioned to move forward with the right Microsoft product portfolio at the right cost profile, which may include Copilot.

At UpperEdge, we help our clients stay ahead of impending product launches and Copilot subscription price increases. Explore our Microsoft Advisory Services to see how we can help your organization prepare for the inevitable push of Copilot.

 

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