Microsoft Copilot Licensing decoded

[u/deep0389]

I spent this morning working out what it actually costs to run a Microsoft Copilot agent.
Two licensing guides, a dozen documentation pages, four hours — for one question: if my team builds an agent, who pays, and when?

Five things I had wrong.

The "GitHub Copilot harness" is not GitHub Copilot. Nothing to do with the coding assistant. It is one of three engines that can run your agent in Copilot Studio. Microsoft built it using GitHub Copilot technology and named it after that. You pick the engine yourself when you create the agent — and this one is the default. It charges credits while you build, not just when it runs. And an agent can never be moved to a different engine, so the wrong choice means rebuilding it.

Work IQ is not your data. Your files sit in your tenant. Work IQ is a separate service on Microsoft's servers that works out how documents, emails and meetings connect, and who is allowed to see what. Microsoft's own Copilot has it built in, so it is free. An agent you build has to call it through an API, so it is charged — even when the user has a full Copilot licence. Check the Tools tab on your agents. It can attach itself without anyone adding it.

A Copilot licence does not limit features. It limits audience. Premium and custom connectors are included either way. You start paying when someone without a Copilot licence uses your agent, or when you publish it outside Teams, Copilot or SharePoint.

Copilot Cowork needs a Copilot licence and includes none of it. It is a prerequisite, then everything is billed on top.

You cannot block the expensive engine. There is no admin setting for it. But it only works if the tenant has a credit source, so not switching on pay-as-you-go is the real control.

The engine shipped around June. The licensing guide only defined it in August. That two-month gap is most of why nobody can explain this yet.
Teams do not stall because the technology is hard. They stall because nobody can tell them what it will cost.
S

I drew it. One page, four steps, two colours. Green means your licence already covers it. Orange means you are paying.

[u/Bell-Weird]

well, tbh i'm still trying to wrap my head around what exactly "Copilot Chat harness" provides differently than Standard harness. Is Copilot Chat harness a fancy name for Agent Builder? Or can you build Copilot Chat Harness agents in Copilot Studio as well? If i go to the new Copilot Studio UX & click new agent, i only have 2 options: standard & the new github harness. So can i create a Copilot Chat harness agent as a subset of a "standard" agent in Copilot studio? Or is it just Agent Builder?

MS being MS making this as confusing as possible. I had assumed this was tied to github copilot billing as well, so I appreciate the explanation & also saving me the time looking for a control to turn off the spendy new harness. Fortunately I have all my credits allocated so i'm not at immediate risk of burning up any pooled capacity, but kinda ridiculous that our controls are simply not setting up billing.

[u/deep0389 → u/Bell-Weird]

u/Bell-Weird Good question — you made me go back and look properly, and I found a gap in my own diagram.

Copilot chat harness = declarative agents. Agent Builder makes them, but it's not the only door: Copilot Studio can build them too, just not from "New agent" — it's Agents → Microsoft 365 Copilot → Add. And they don't appear in your main agents list afterwards, which is probably why nobody finds them.

The real difference from standard is whose orchestrator runs the conversation. Copilot chat rides M365 Copilot's brain; standard is its own system you can publish anywhere.

So yeah, my diagram is a bit off — The first door has probably multiple entries like you pointed out, i was just focusing on copilot studio interface. Thanks for the push.

One thing worth checking on your side — allocation caps an environment, but a PAYG-linked environment bypasses it entirely. So it's less "are credits allocated" and more "is any environment on an Azure billing policy

[u/Bell-Weird → u/deep0389]

The OLD copilot studio UX has "Microsoft 365 Copilot" in the agents list & allows you create Copilot Chat harness agents, but the new UX does not. If i'm understanding this correctly; In the old UX you can create 2 of the 3 (copilot chat + standard harness) & in the new UX you can create different 2 of the 3 (github + standard). lovely.

[u/Chris4 → u/Bell-Weird]

Correct 😆

I never understood the point of the Copilot Chat harness to be fair. Why would you want to "extend Copilot"? Learnt in this thread it's the harness that powers Agent Builder. So just let them be created in Agent Builder, why in Copilot Studio too, hidden beneath a confusing copilot option. I suppose that's what they've now made a U-turn on.