Microsoft unveils Agent 365 & new Microsoft 365 E7 suite

Microsoft has outlined a new set of Microsoft 365 Copilot updates, along with a new bundle that combines its security suite with Copilot and new agent-management tooling.

The announcement marks Microsoft's third wave of Microsoft 365 Copilot changes, includes plans to make Agent 365 generally available, and introduces a new package called Microsoft 365 E7: The Frontier Suite. Microsoft has also expanded the range of AI models available in Copilot, including Anthropic's Claude and a new generation of OpenAI models.

Judson Althoff, CEO of Microsoft Commercial Business, framed the updates as part of what Microsoft calls "Frontier Transformation," describing "Intelligence + Trust" as central to moving AI from pilots into mainstream business use.

Copilot updates

Wave 3 of Microsoft 365 Copilot introduces what Microsoft calls a "next generation of agentic experiences" across Word, Excel, PowerPoint, and Outlook. Employees will see an enhanced chat experience, and users will be able to create and refine work artefacts and build their own agents within the tools they use every day.

Microsoft also highlighted an approach it calls "Work IQ," describing it as an intelligence layer that draws on organisational context, such as how people work together and which content they collaborate on. Microsoft says this makes Copilot faster and more accurate than products that rely on models and connectors alone.

Microsoft reiterated that Copilot is "model diverse by design," supporting models from OpenAI and Anthropic and operating across clouds and data services. Through Microsoft's Frontier programme, Claude is now available in Copilot's main chat alongside the latest OpenAI models.

The company also referenced a research preview called Copilot Cowork, which it says is being developed in close collaboration with Anthropic. Microsoft plans to bring the technology that powers Claude Cowork into Microsoft 365 Copilot for "long-running, multi-step work that unfolds over time."

Agent governance

Another major theme was governance and security for AI agents. Microsoft pointed to faster development and broader use of agents, arguing that organisations need clearer controls as agents become more autonomous.

Microsoft cited IDC forecasts of 1.3 billion agents in circulation by 2028. It also said 80% of the Fortune 500 already use Microsoft agents, with adoption led by manufacturing, financial services, and retail.

Agent 365 is positioned as a "control plane for AI agents," giving IT and security leaders a single place to observe, govern, manage, and secure agents across an organisation using existing infrastructure and protections. Agent 365 is due to reach general availability on May 1 and will be priced at $15 per user.

From its preview programme, Microsoft reported that tens of millions of agents appeared in the Agent 365 Registry within two months, and that "tens of thousands" of customers are adopting Agent 365.

Internally, Microsoft says it is using Agent 365 as "Customer Zero," with visibility into more than 500,000 agents. Common examples focus on research, coding, sales intelligence, customer triage, and HR self-service. Over the past 28 days, Microsoft says agents have generated more than 65,000 responses per day for employees.

New bundle

Alongside Agent 365, Microsoft announced a new subscription bundle called Microsoft 365 E7: The Frontier Suite. E7 combines Microsoft 365 E5, Microsoft 365 Copilot, and Agent 365 into a single offering.

Microsoft says E7 is "powered by Work IQ" and integrated with its apps and security stack. The suite includes Microsoft Entra Suite and "advanced Defender, Intune and Purview security" to protect both agents and employees.

Microsoft set the price at $99 per user and says it is cheaper than buying the components separately. The company also said customers have asked for fewer tools and more consolidated packaging.

Adoption claims

Microsoft linked the product changes to adoption figures for Copilot. It reported its "strongest quarter yet," with paid seats up more than 160% year on year and daily active usage up tenfold.

Microsoft also said the number of customers deploying Copilot at significant scale-defined as more than 35,000 seats-tripled year on year. It cited a global rollout by Mercedes Benz and listed other organisations it said have invested in Microsoft 365 Copilot, including NASA, Fiserv, ING, the University of Kentucky, the University of Manchester, the US Department of the Interior, and Westpac. Microsoft also said 90% of the Fortune 500 now use Copilot.

"At Microsoft, we believe the two most essential elements of Frontier Transformation are Intelligence + Trust," said Judson Althoff, CEO of Microsoft Commercial Business.

Microsoft said Agent 365 and Microsoft 365 E7 will reach general availability on May 1. Claude is available in Copilot chat via the Frontier programme alongside new OpenAI models.