Microsoft Struggles to Convert Enterprise Dominance Into AI Chatbot Adoption

Himasha Dissanayake, JadeTimes Staff

H. Dissanayake is a Jadetimes news reporter covering Technology

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Source: John Taggart | Bloomberg | Getty Images

Microsoft’s dominance in enterprise software is proving tougher to translate into widespread use of its AI chatbot, Copilot, as adoption challenges continue to slow the company’s ambitions in the rapidly expanding artificial intelligence market.

Consultant Adam Mansfield of UpperEdge said many corporate clients remain reluctant to purchase Copilot licenses, priced at $30 per user per month for the commercial 365 version. Some companies are even requesting fewer seats, with Mansfield noting, “I know a lot of customers who are like, ‘Yeah, I want 300 to go to zero.’” Users question whether Copilot provides enough value to justify the cost, despite its capabilities in generating presentations, summarizing emails, and extracting insights from private company data.

While Microsoft leads in cloud AI infrastructure—Azure posted 40% revenue growth last quarter and continues to power OpenAI’s efforts selling AI agents poses a different challenge. Customers must decide whether the benefits of employee-facing AI tools outweigh the expense, especially as rivals like Google, Salesforce, Adobe, Workday, OpenAI, and Anthropic crowd the market.

Some businesses are choosing alternatives. Eon, a Sequoia-backed cloud startup, uses Azure but relies on AI coding tools from smaller firms. Google’s Gemini is also gaining ground, with large companies reportedly moving workloads to Google specifically to use its AI models.

Discounts may no longer be enough to sway buyers. Microsoft partners report previous offers of up to 50% off Copilot licenses, though incentives are declining. A lower priced tier, Microsoft 365 Copilot Business at $21 per user for up to 300 users, launches in December.

Despite skepticism, Microsoft points to notable enterprise wins. CEO Satya Nadella said over 90% of Fortune 500 companies now use Microsoft 365 Copilot in some capacity. Land O’Lakes expanded its rollout from 20% to all 5,000 knowledge workers and built new internal tools with Microsoft’s AI. Education publisher Pearson deployed Copilot to its entire 18,000 workforce and launched a new AI-powered Communication Coach built on OpenAI’s GPT-4o mini.

Source: Tiffany Hagler-Geard/Bloomberg/Getty Images

Microsoft’s AI ecosystem continues to grow. New access to Anthropic’s Claude models and heavy commitments to Azure solidify Microsoft’s cloud position. Internally, the company claims 70% of its commercial sales and services teams now use Copilot daily, up from 20% last year.

Even so, Mansfield believes the competitive landscape has shifted: “Microsoft is trying to catch up, quite honestly. Their sales reps actually now have to learn to sell.”

For Microsoft, the path forward hinges not only on powerful AI models, but on convincing customers they are worth paying for.