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Office365 tops 400 million paid users. Microsoft credits Copilot AI for Office growth

 Office 365 apps on WC background.
Office 365 apps on WC background.

What you need to know

  • Office Commercial products and cloud services revenue increased by 15% driven by Office 365 Commercial revenue growth of 17%

  • With innovations in Copilot, Teams, and other commercial products Office365 users have increased.

  • Microsoft's push to innovate its commercial productivity offering with AI seems to be paying off.


Microsoft's most recent earnings report just released and was full of great news for the company while a lot of other tech companies are struggling to break even. While the Copilot integration into Office365 is still in its early stages, and there have been small changes to many of Microsoft's commercial products that have improved productivity. With Microsoft's decision to put Copilot into everything, Microsoft has been betting it all and while the actual implementation isn't very far along, it seems that enterprises are seeing the writing on the wall and starting to gravitate towards Office365 products.

While it's hard to quantify what 400 million paid users mean without being able to compare it to other similar commercial productivity suites, it does seem to be a large amount of growth for Microsoft. The company continues to soar ahead as it recently became the most valuable company in the U.S.

Is Microsoft's Copilot plan paying off?

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There isn't much to celebrate here unless you are a Microsoft shareholder, that being said it's good to see a company that makes products we love continue to diversify its portfolio and push for growth by actual innovation rather than drastic price increases. It's great that Microsoft has 400 million paid users for its commercial Office365 products. It shows that corporations continue to invest in productivity and believe in the AI future that Copilot is promising.

We’re also seeing a Copilot ecosystem begin to emerge. ISVs like Atlassian, Mural, and Trello, as well as customers like Air India, Bayer, and Siemens, have all built plugins for specific lines of business that extend Copilot’s capabilities. When it comes to Teams, we again saw record usage as organizations brought together collaboration, chat, meetings, and calling on one platform. And Teams has also become a new entry point for us. More than two-thirds of our enterprise Teams customers buy Phone, Rooms, or Premium. All this innovation is driving growth across Microsoft 365. We now have more than 400 million paid Office 365 seats. And organizations like BP, Elanco, ING Bank, Mediaset, WTW all chose E5 this quarter to empower their employees with our best-in-class productivity apps, along with advanced security, compliance, voice, and analytics.

As the above quote talks about, many companies are moving to invest in Office 365, and it seems to be on the back of Copilot and Teams improvements.

While Microsoft has been getting raked through the coals for the recent layoffs of 1900 employees from the gaming division, it looks like it has weathered that storm, and the earnings reports shed further light on the need for those layoffs. It is fantastic to see each division in Microsoft able to carry its weight while other large corporations have substantial loss leaders being carried by one division.

Will AI continue to push growth for Microsoft?

The future looks bright for Microsoft as it continues its push to be the leader in AI. We recently discussed how Microsoft is looking to differentiate itself from OpenAI's ChatGPT so that it might be able to survive if all of the lawsuits against OpenAI and Microsoft don't go their way. Suppose Microsoft can weather the legal storm headed its way due to copyright infringement, as well as the moral and ethical issues that came up last week with explicit AI images of Taylor Swift popping up online. In that case, Microsoft has a winner on its hands.

I don't think AI has had that watershed moment yet that makes it irresistible to the mainstream. However, from a productivity standpoint, it can benefit small tasks, especially programming.

If Microsoft can find that one use case that makes Copilot a necessary part of daily life for the entire globe, then Microsoft shareholders will have even more reason to celebrate than they do today.

Office 365 subscription | Microsoft.com

If you don't have an Office365 subscription yet, it's a great time to pick it up. Copilot integration is only getting better, and while commercial customers have to pay quite a bit extra for Copilot, so far consumers are getting Copilot features for free on top of their Office 365 subscriptions. View Deal