Watch this video to understand what’s new in Microsoft 365, including renewal changes, licensing updates, and AI agents.

Video transcription:

Hi everyone, and welcome to AIQ from Wavenet’s Modern Work department. My name is David Campbell, and I’m the Product Manager for Modern Work at Wavenet. Today, we’re going to be discussing updates from a Microsoft perspective, including new developments in the AI space and around agents. I’m joined by Michael Sittig and Ella Goodhart, and we’ll be talking through these latest changes.

Michael, let’s start with the 30-day grace period.

Microsoft has effectively removed the 30-day grace period. Previously, if a customer missed a renewal, they would still retain access to their data and services for 30 days. Moving forward, from April 1st this year, customers will instead be automatically moved onto an extended service term. This comes with a 3% surcharge on top of their existing pricing. They will still be able to use services and retain their data for up to 12 months, which allows time to arrange a renewal.

Microsoft has recognised that some customers were reaching renewal and effectively receiving an additional 30 days of service at no cost. This change is intended to prevent that and encourage customers to manage renewals more proactively before the renewal date. Planning ahead will also help avoid unnecessary cost increases.

We typically recommend that customers contact their licensing provider around 90 days in advance. This allows time to review licensing, explore new features, and ensure the environment is as cost-effective and functional as possible.

Another point to be aware of is the 5% fee Microsoft introduced last year. If you commit to an annual licence but choose to pay monthly, you will pay a 5% premium. There are now effectively three pricing tiers. Paying annually upfront is the standard recommended retail price. Paying monthly on an annual commitment adds a 5% fee. Moving to a fully monthly rolling licence carries approximately a 20% premium.

There are now more factors for customers to consider when approaching renewal, so auditing usage and planning ahead is increasingly important.

Traditionally, many customers preferred monthly payments for budgeting, but if a business can pay annually, it can avoid that additional 5% cost.

Let’s talk about renewal season. We know that most renewals happen in the first part of the year, and co-terming is often recommended. Why does co-terming come into play?

Renewal season typically runs from the end of Q1 into Q2, largely because Microsoft’s financial year ends in June. During this period, Microsoft often introduces promotions to drive business, which encourages customers to renew or align their licences.

One of the main benefits of co-terming is having all licence renewals aligned to a single date. Without co-terming, organisations can end up with multiple renewal dates spread across the year, which becomes difficult to manage. Aligning everything simplifies administration and can also strengthen negotiating power when reviewing agreements with partners.

Co-terming issues often arise when licences are added mid-year without alignment. This results in multiple end dates and can lead to inefficiencies, including unused licences.

It is common to see organisations with multiple subscriptions for the same product due to different admins making purchases independently. Co-terming helps consolidate these into a single renewal date and simplifies overall licence management.

In simple terms, co-terming means ensuring all licences renew at the same time rather than being spread across the year.

Let’s discuss how often organisations should review their licences. Ideally, this should be an ongoing process, but at a minimum, customers should review their licences at least 90 days before renewal. This allows time to analyse usage data, identify underutilised licences, and ensure no licences are assigned to inactive users.

It also provides an opportunity to plan for future changes, explore new solutions, and take advantage of funding programmes or promotions.

A licensing review should also consider whether tools have been fully deployed and adopted. Given how frequently Microsoft updates its products, it is important to regularly reassess whether organisations are maximising value from their licences.

Let’s talk about tooling and optimisation assessments.

We use a tool called Streamline, which is built using Microsoft Graph API data. It can be installed quickly by a global admin and collects data across both Azure and Microsoft 365 environments.

This allows us to analyse data and provide recommendations on Azure architecture, cost optimisation, and licensing usage. We can assess whether organisations are over-licensed or under-licensed and help optimise both cost and performance.

Although it sounds like a premium service, it is offered free of charge to customers. The only consideration is that it typically takes around 21 days to gather enough data for analysis.

Now let’s move on to agents.

Over the past couple of years, much of the discussion has focused on Copilot and generative AI. Recently, Microsoft has been emphasising agents. An agent is essentially AI designed to perform specific tasks that a person would normally carry out, rather than simply responding to prompts.

Unlike Copilot, which integrates into applications and responds interactively, agents are more task-focused and operate with defined roles.

For example, Copilot already includes built-in agents such as an analyst agent and a research agent. These are designed to specialise in particular tasks rather than act as general-purpose AI tools.

Microsoft is also introducing new agents, such as employee self-service agents. These are designed to respond to specific queries, such as HR questions, using company policies and contextual understanding. Other agents, such as those used in marketing, may adopt a more creative and flexible tone.

Organisations can also create their own agents. For example, an agent could be trained on internal documentation to answer recurring queries, saving time and improving efficiency.

However, creating multiple agents introduces governance challenges. To address this, Microsoft has introduced Agent 365, which provides a central platform to manage and monitor all agents within an organisation.

This governance layer is an important differentiator for Microsoft compared to other AI platforms such as ChatGPT or Gemini, which do not yet offer the same enterprise-level oversight.

When combined with Microsoft’s Work Graph, this creates a strong AI ecosystem integrated with security and compliance tools.

While other AI tools may have advantages in specific use cases, Microsoft Copilot offers a strong, general-purpose solution within the Microsoft ecosystem, particularly when combined with its security and compliance capabilities.

Microsoft is also releasing industry-specific copilots, such as Copilot for healthcare professionals, finance teams, and sales teams, each designed to support specialised tasks.

Agents also enable integration with other data sources, such as CRM systems, allowing organisations to automate responses, generate insights, and improve operational efficiency.

Not every employee in an organisation will need a full Copilot licence. Instead, some users may interact primarily with agents. Microsoft supports this with flexible pricing, including per-request or per-prompt models.

Thank you very much for joining us today. We hope you enjoyed the session. Please feel free to explore our other videos or get in touch if you have any questions.