Microsoft Teams Insider

Microsoft's AI Shift and Fastest Ever Changes with Mary Jo Foley

Tom Arbuthnot

Mary Jo Foley, celebrated tech journalist and current Editor in Chief at Directions on Microsoft, joins the podcast to delve into the rise of AI and Copilot at Microsoft and the ever-increasing pace of change.


  • Mary Jo's journey from tech journalism to leading content strategy at Directions on Microsoft
  • Insights into how enterprise organizations are navigating Microsoft's swift AI advancements
  • The impact and challenges of Microsoft's Copilot and agent offerings on enterprise licensing and strategy
  • Challenges understanding the complexities of Microsoft's pricing and licensing models, particularly regarding new AI services


Thanks to AudioCodes, this episode's sponsor, for their continued support.

Tom Arbuthnot: Hi, and welcome back to the Teams Insider Podcast. This week we have an awesome guest, Mary Jo Foley. I'm sure some of you know her in the space. She's been a, a long time follower of Microsoft on the journalistic side, and in the last few years she's joined directions on Microsoft who are a company focused on helping enterprises.

Understand and optimize, uh, their Microsoft use, their Microsoft spend. Really awesome conversation with her. All about Microsoft history, the pace of change and how much AI and Copilot has been changing and impacting organizations recently and what they're doing to cope with that change. Thanks to Mary Jo taking the time to jump on the pod and also many thanks to AudioCodes to are the sponsor of this podcast.

Really appreciate their support of everything we're doing at Empowering.Cloud on with the show. Hi, Rudy, welcome back to the podcast. Exciting guest for me personally here. Uh, I, I've been on Mary Jo's podcast, uh, a few years ago, but we're now, we're, uh, we're going full circle and she's on mine. So excited for that.

Uh, Mary Jo, welcome to the show. 

Mary Jo Foley: Thank you very much, Tom. 

Tom Arbuthnot: Awesome. So I, I feel like a lot of people in our space will know you, particularly with the, uh, the kind of, uh, journalism history and ZDNet and Windows Weekly, which we'll all go through. Right. Um, but maybe we could start with kind of, uh, who you are and what you're doing today, and then we'll go through the, uh, I'd love to go through the kind of history of how we got here.

Mary Jo Foley: Okay. Sounds good. So, my current job is I am editor in chief at a. An IT advisory and planning company called Directions on Microsoft. And so even though we have Microsoft in our name, we don't have, we're not part of Microsoft. We don't have anything really directly to do with them. Other than that we cover them.

Um, we work for enterprise customers who need information about Microsoft Enterprise services and products. Uh, we also have a very strong. Uh, licensing business so that we help customers with their enterprise agreements and licensing negotiations with Microsoft. So we basically are a one-stop shop for anyone who has a lot of Microsoft products in their enterprise.

Tom Arbuthnot: And that's a big part of what directions is, is independence. So it's not a, a Microsoft partner pitching the Microsoft stack. It's an independent view on what enterprises could do.

Mary Jo Foley: That's right. 

Tom Arbuthnot: Awesome. Yeah. So, but you, you yourself, uh, didn't use, I, I feel like you are more close to my world than you, you used to be.

Yeah. You, uh, you were kind of, went through the journalism route and, and obviously covered Microsoft for quite, quite some time. And, and, and you and I went back and forth in those days talking. We did. So talk, talk us through that journey. 

Mary Jo Foley: Yeah, so I, I have been a journalist for 41 years as of this year. Uh, my career started out in tech.

Um, I didn't know anything about tech when I started out, but I just happened to get my first job at a magazine called Electronic Business. So I learned about tech and that was my beat. Um, from the very beginning of my career, and so it's been really fun. I, I've covered Microsoft mostly during that period, but I've also covered some other companies too.

Like, I had a stint where I was covering, um, Sun Microsystems and Unix, like I was a Unix reporter for a while. Did some database reporting for a while. Um, did a bit on Linux. Um, and then I came back, uh, when I joined PC week. And they needed a Microsoft reporter and they're like, Hey, you know about Unix, they have this product called NT over at Microsoft.

Seems like it's the same thing, right? I'm like, uh, no, not the same, but, 

Tom Arbuthnot: and they were like, okay, you're already an expert. Because we thought it was, 

Mary Jo Foley: I know they're like, you know about operating systems. I'm like, uh, I guess So that's how I started covering Microsoft full-time. Basically was they needed a Microsoft reporter and uh, they moved me up to Seattle so that I could report on Microsoft from Microsoft's backyard.

As you probably can imagine, made me really popular with people up there. When they found out what I was doing, they're like, wait, are you spying on us? I'm like, no. I'm a reporter. 

Tom Arbuthnot: The stories of riding the buses and uh, being on campus, 

Mary Jo Foley: I was thinking the other day, I am like, there's stories about me that are true of things that I did while I was there to get a story, and then there are other stories that people say.

Uh, that they've heard about me, that I'm like, wait, what? Like a famous one is so many people think I disguised myself and worked in the Microsoft cafeteria flipping burgers. I've had several people say they saw me there doing it, and I'm like, I could tell you guys like I've done a lot for a story, but that is one thing I have not done.

Tom Arbuthnot: Oh, not a bad idea though. I 

Mary Jo Foley: know. I'm like, could I have done that? But yeah, it, it's been a really fun ride and I. I have been a journalist my whole career. I still feel like I'm a journalist even at Directions because my job here is to write the blogs and do the podcast for our company. So I feel like I'm still doing journalism even though I'm more on the analyst side now than I am in pure journalism.

Tom Arbuthnot: And you've always covered Microsoft in your jour like, uh, pure journalism days from more of a. Enterprise and company perspective. So Windows Weekly still is a regular listen for me, that podcast and, and I love the balance you and Paul had there 'cause you were bringing the enterprise perspective, which is a bit more what I'm interested in on my side of the world as well.

Mary Jo Foley: Right. I, when I joined Windows Weekly, so I, I did that podcast, um, for 10 years when I first came on. Um, they weren't really sure about having someone do enterprise content because. Almost every show on TWiT, which is the home of Windows Weekly, is consumer focused. So I started talking about things like Hadoop and um, data lakes, and all of a sudden they're like, wait, what are we doing here?

Like, what? Yeah. And it was fun. It was fun because it, I think it exposed people who didn't know the enterprise side of Microsoft to that world. And I had people just like joking around say, you know what? I didn't know they did this or that, but once you talked about that, I'm like, maybe our company should look into that.

Right. 

Tom Arbuthnot: Yeah. Yeah. Well a lot of the people that are very interested in tech, in their consumer lives also work in Right tech or IT as well, so there is Exactly. 

Mary Jo Foley: For sure. Exactly. Yeah, so it's been kind of a full circle journey for me. I, I feel like I started as a journalist. I still am doing a lot of things that are journalistic and my whole world.

For the past, I'd say 20 years has been Microsoft, so yeah. 

Tom Arbuthnot: Awesome. So, so there's some context for everybody in this kind of journey story and, and how's it been jumping from your journalism over to kind of managing content? I mean, you've got some amazing colleagues at Directions. I feel like from a, from one point of view, you've got an awesome set of people to, to pull content out of.

Mary Jo Foley: It's true. Um, it's been really fun working with our group of analysts because all of them have worked in the industry. As long as me, if not longer. Some, uh, some of them have worked at Microsoft, some have not. Some have been like CXOs and CTOs and, um, done those kind of jobs in the industry. Um, all of them have a really deep well of knowledge in their respective spaces.

So anytime I don't understand something or I'm a little puzzle on something, I just drop an email. I'm like, what? Is this what I think it is? And then get great immediate feedback, which is really cool because you, as a journalist, you sit around waiting a lot of times for people to get back to you and explain things to you that aren't quite clear.

And now I have these people right at my fingertips, so I'm like, this is awesome. Right? 

Tom Arbuthnot: Yeah. That's amazing. I remember like a, a couple of times you quoted various, uh, bits and pieces that I was talking about in, in your blog, like way in the early days, and it was, it was always like a really nice thing for me back in the day to be like, oh look, it's, it's actually useful content.

That's good to know. Right, 

Mary Jo Foley: right. Nice. Awesome. 

Tom Arbuthnot: So like, let's, let's talk about that, uh, kind of experience of Microsoft over that time. 'cause it feels like we're in this period of just. Insane change and it's always been fast and we've always said this, but this AI thing and the competition between the big players just is, has stepped it up a gear.

Is that what you are seeing as well? Uh, 

Mary Jo Foley: definitely. I, at one point I'm like, am I just getting older and so I'm slower or is it that everything is happening way faster? And I think it's probably a combination of both. But um, the AI stuff, I feel like Microsoft. Is so adamant on trying to be first in this space that they're just throwing things out there way earlier than they used to with software and, and cloud services even.

Um, like something's not even baked and they're like, okay, we're shipping it and names change. Pricing is changing. licensing is changing like constantly. Right. And just when you think you understand it, yeah. It feels almost 

Tom Arbuthnot: perpetually experimental. It's like, will will this work? Do people like this? Nope.

Move it around. They like that. Right, right, right. And so 

Mary Jo Foley: yeah, it's really it's hard to track it, right, because you, you have something with a name. You think you understand it and suddenly, oh no. Now it's named this, it's over here in this group. Now it's priced like this instead of this, and, and just trying to keep track anymore is insane.

Tom Arbuthnot: Yeah. Yeah. And AI, particularly with the kind of Insider baseball on the Microsoft side, it wasn't like there was one person or one group who was strategising that it was, here's AI, we know it's gonna have a huge impact. Do some stuff like across the whole, yeah. Literally across the whole org. 

Mary Jo Foley: It's true.

And then. C naming everything Copilot. For, for people who've covered Microsoft and paid attention to Microsoft for a long time, it's like when they named everything.net at one point back in Microsoft's history and I'm like, wait, this is named Copilot. This used to be named something totally different, especially in Dynamics.

Right. I, I feel like in Dynamics they had a lot of these technologies in place. They did. I think, I think 

Tom Arbuthnot: I, I kind of feel bad for them. Well, great. In it's a glory time for that. Right. Business unit, but like, like, like all of the, the Copilot studio and all the power platform stuff, it's got a new massive lease of life because AI makes it way more.

That's right. Useful and accessible. 

Mary Jo Foley: Exactly. Yeah. Uh, so just even that kind of stuff, like, you're like, oh, I, I knew what this was when it was called, you know, power virtual agents and suddenly it's now Copilot studio. Right. And everything is upside down and 

Tom Arbuthnot: Yeah. 

Mary Jo Foley: Trying to understand. I, I think something else that's cut that a lot of people are a little puzzled about is they were on this low code, no code journey, then AI happened.

Right. And now it's like, do you still need that? Because now you've got GitHub Copilot. Do you really need low-code, no-code anymore. Right? Their answer is yes, obviously. 

Tom Arbuthnot: Yeah. Yeah. And it's kind of a, it's kind of a, uh, a plethora or a spectrum of options, isn't it? It's like there is, but, but where the lines definitely blur and I'm seeing 

Mary Jo Foley: Yeah.

Tom Arbuthnot: The enterprises I talk to that traditionally would have A-A-A-A-A true, what I would call low-code team stretching into. Azure functions and Azure for, for the AI stuff and, and, and, and vice versa. Actually, Copilot studio just in itself is quite powerful. It's so you can do quite a lot without having to jump into, uh, proper code.

The the other variable that's fascinating is, and I've seen this in my personal work, is with things like, uh, GitHub Copilot actually, I mean, I, I only do bits of. PowerShell scripts, you know, but like that stuff, I'm, I'm definitely 10 x more powerful than I was, and I'm not a coder, but the AI kind of accelerates everybody's capabilities in that space, I think.

Mary Jo Foley: Yeah, for sure. Um, I think it's gonna be really interesting, you know, as they're talking about the future of where. Their low code platform is going, they're talking more and more about maybe you're not gonna need apps anymore. Maybe you're gonna just have all these agents interconnected. And I'm like, wow.

Okay. So now we're making a really big jump here, right? Yeah, yeah. Sa sa 

Tom Arbuthnot: Satya made a play, didn't he? That like, uh, SaaS is gonna be the thing. It's all gonna be like agent based, which feels, feels a little extreme to me, but, uh, I know, I guess, I guess it's a point. 

Mary Jo Foley: Yeah. I mean, the fact that Charles Lamana, who headed up that business has just been promoted and moved over into the office group.

Right. Yeah, it's, it's kind of interesting because then if you think it through, you're like, okay, if they're talking about the Dynamics apps, possibly going away and being replaced by agents, all interconnected, is that where, where they're gonna go with the office? 

Tom Arbuthnot: Yeah, it's all coming under reds jar isn't now.

Which is interesting because it, it finally feels like there's some, uh, ownership to the term it does Copilot, at least in the enterprise space. 

Mary Jo Foley: That's right. I know because everything was named Copilot at one point. It's hard sometimes to know when they're saying Copilot. Are they talking about the Copilot that was being chat or are they talking about Microsoft 365 Copilot or Copilots on Dynamics or GitHub Copilot.

Yeah. 'cause even though they all have the word Copilot, they're definitely not all the same. Yeah. 

Tom Arbuthnot: Yeah. And then we've got, in the enterprise, we've got Copilot chat and M365 Copilot, even within M365, and I think Microsoft to some extent, deliberately blur all, all these lines to tell a story while they're working out what?

What goes where. Yes. The consumer one's the hardest one for me, that being called Copilot and having nothing to do with 

Mary Jo Foley: Yeah. 

Tom Arbuthnot: Enterprise, but, but often we see features come there first and then later come through to the enterprise versions. 

Mary Jo Foley: I know. Yeah. It's definitely. Hard to keep your eye on the ball as everything's changing all at the same time.

Right. 

Tom Arbuthnot: I'm, I'm kind of selfishly glad that Microsoft made this early bet on AI are in and they're in the race and in the center of the conversation. 'cause, 'cause in another world they could have not made that bet and actually been on the sidelines doing the traditional enterprise stuff and, and mm-hmm.

It's a, it's a service now or it's Google, it's somebody else who's at the front line. So for better or worse of all this change we're kind of going through, at least they're. And, and at the forefront of this conversation. 

Mary Jo Foley: Yeah, very true. Um, I, I remember not that long ago, maybe like 10 years ago, people.

Used to ask me a lot, why are you still covering Microsoft? They're so boring. They're not, they're not doing anything innovative. They're not in any space. That's interesting. And I kept saying, you know what is interesting about Microsoft? They reinvent themselves constantly. They're, they have so many products in so many markets, it's never boring because even if, even if they're in a lull.

Know, very shortly something big is gonna happen and something's gonna change, and suddenly they're gonna be in the race again. Right. 

Tom Arbuthnot: Yeah, totally. And, and they've proven at times time again, also the things that we Yeah. Both respectively follow. They might not be interesting to the consumer tech world.

Right. But things like the growth of Azure and, and, and, 

Mary Jo Foley: yeah. The 

Tom Arbuthnot: whole, whole dynamics B and obviously I follow the. OCS, Skype Business Link teams journey, which is like the, and, and the pandemic and how that just blew up, you know? Yeah. Teams was the center of the world for quite a few years in a row before Copilot was kind of the next big thing.

Mary Jo Foley: Definitely. Yeah. And, uh, 

Tom Arbuthnot: yeah, it's, it's interesting. Some of these bets take longer. Long to pay off than maybe they and, and the world thinks, but often they're, they, they come through. 

Mary Jo Foley: Yeah, I know. And sometimes it looks crazy. Something they do looks insane. Like everybody was like, slack obviously is gonna win in this space.

Right. And then they come out with their own product teams and people were very skeptical at the beginning. They're like, oh man, they built their own when they could have just gone and bought Slack and. Taken the market leader or bought Zoom and taken that company, and now in hindsight, it looks like they made the right bet, but at the time it was just like, what are they doing?

Right? 

Tom Arbuthnot: Yeah. And it's interesting for, for Teams as well because it's become one of the main surfaces for the, the AI conversation for kind of knowledge workers because the meeting recaps the right, engaging with the agents. Actually a lot of that still ends up teams is their kind of surface for that.

Mary Jo Foley: Yeah, I think teams Copilot is what sells Microsoft 365 Copilot for a lot of people. Right. 

Tom Arbuthnot: Yeah, I, I, I think I, I hear that meeting, meeting recap and meeting summary is still one of the highest used workloads in all those scenarios. 'cause everybody has that problem. Everybody understands it. And something that can summarize and gimme minutes and actions is just super valuable.

Mary Jo Foley: It is. We use it at Directions for our. Regular meetings during the week, and it, it's been great. It's like things, you forget that you got assigned and suddenly you're like, oh yeah, I forgot that. That's good that that's there. 

Tom Arbuthnot: Yeah. And it's kind of interesting that we're still really, uh, the beginning of this journey as, as what, what will be possible with AI reasoning over our, our emails, our data, our meetings.

Like you, you can definitely see a future where we get to the point where it's. It's got so much context, it can be way more useful. Like, what should I do this week? You understand everything that's going on. Where should I place my time? What's the things that I need to do next? That, that kind of stuff, I'm really excited for.

Mary Jo Foley: I haven't really used it that way myself, because I feel like my workday is very unscheduled and haphazard. Like I don't have a lot of, 

Tom Arbuthnot: I'm, I'm hoping it will save me from that. That's what I'm hoping. 

Mary Jo Foley: I know maybe I should try using it and make my workday less haphazard, but. 

Tom Arbuthnot: But how's it been with, with the Directions on Microsoft and the customers?

Like you do a lot of advisory. I think it's skewed towards enterprise, doesn't it? How it does, how have, how have they hoped with embrace this, this, this pace of change and this AI kind of, uh, well, I guess AI thing across the board, 

Mary Jo Foley: all of our customers are enterprise customers and. At the beginning when Microsoft started talking about AI and Copilot, we did not get a lot of customer questions about it because I think people were skeptical still.

They're like, yeah, that seems researchy kind of, and that futuristic, right. Um. Suddenly, I think because Microsoft was talking so much to enterprises about this, we started getting questions like, people were like, what are all these Copilot things? Should I be using this? How does this work? How does the licensing work?

How does the pricing work? And all of a sudden, a flood of Copilot questions started coming in. Right? And. I felt like what we get to see all the customer questions as they come in. And it's been interesting to see where are people confused, right? And what parts do they think they understand? Yeah. And what parts do they completely not understand?

And um, I. We also do, uh, regular things that we call licensing boot camps. So we do some of these virtually and some in person so people can come in and learn about how to negotiate their Microsoft licensing contracts and how their licensing programs work and policies work, which 

Tom Arbuthnot: again, has got hugely complicated over the last few years.

I mean the, yeah, the, the, the E5, everything's SKU and you're done. And then it's now actually, no, it's all these, all these add-ons. Every product suite basically has a premium. 

Mary Jo Foley: Everything has an add-on, right? And at these boot camps you see, you see customer's questions evolve, right? Like at first they're like, yeah, the Copilot thing, it's over there.

Now it's like, what am I doing with this Copilot thing? Right? So even that has just shown like how. It went from like zero, almost zero interest to now, like everybody's asking about it. Right? 

Tom Arbuthnot: Yeah. It, it feels like not just in the Microsoft space, but like at the CTO level in all organizations. 

Mary Jo Foley: Yeah.

Tom Arbuthnot: Everybody's aware. AI is, I. Changing, disrupting, like it's going to have an impact. You can, we can all debate over the level of impact, but there's no doubt it's going to have an impact. So I think at a CTO level, you've got to have a strategy and, and as soon as you're talking strategy, Microsoft is gonna be one of, in enterprise, it's gonna be one of the players in the mix.

So what are they doing? And, and obviously there's others like ServiceNow are making a, a, a big push. Obviously the other players have a big push as well. So, and the, the big one for me was the. Rebrand of Copilot Chat. So basically, yeah, everybody with a Microsoft 365 license has the kind of chat level ability included in their cost.

Mm-hmm. Um, yet there's still a big, uh, a lot of people have that turned off. There's like a big adoption thing there. Do we use it? Don't we use it? Which is is fascinating to me 'cause it's it's in the box. 

Mary Jo Foley: Right, right. I think people got, um, excited about AI started doing like. Pilots then realised how messy their data estates were, right?

Mm-hmm. And unprotected and not organized. And Microsoft kind of just pushed everybody to it and then came back and tried to talk about things like purview and like getting your data estate in order. So it was a little bit like they pushed people out without all the guardrails in place. And I think that got some people gun shy, right?

Right. They were like, wait, wait, we can't have this thing turned on because suddenly like. Joe in accounting is gonna see the salary of the CEO, right? Yeah. I think people panicked and now I think because Microsoft's been doing a lot more lately about, um, educating people on how they should have, what they should have in place and how they should be.

Rolling Copilots and agents out. I think people are getting a little more confident now, but it was like they rushed them out without having everything already established and 

Tom Arbuthnot: Yeah. And that, and that's true the product suite as well. So like there's lots of demos that were actually pending. See you in six months.

Exactly. People would try Excel's the classic one. Like they would try it and be like, oh, this doesn't do what I thought it would do. No, and, and I'm seeing a bit of a go back motion on a lot of those now. Mm-hmm. The models have got better. Yes. It's got more embedded. And actually what if you tried it? A year ago.

It is, as is everything in ai. It's a completely different product now. It's developed. It definitely is. 

Mary Jo Foley: Yeah. When Excel, when Microsoft 365 went, uh, Copilot went GA, Microsoft didn't publicise this, but Excel Copilot wasn't ready. Yeah. And it was preview. Right. And all the rest of the things were actually GA except for Excel Copilot.

And when people, people were really excited about that because they said, oh, I can see where this is gonna help me. And then it wasn't ready at all. And it was basically broken at the beginning. Yeah, right. And so I think that turned some people off. They're like, oh, this thing's not even ready, like. Excel doesn't work.

They didn't talk about like teams works though, right? Word's pretty good, right? PowerPoint's not bad. 

Tom Arbuthnot: Yeah. Yeah. And, and, and I think that's a danger of over marketing that I see a lot at the moment. It's, yeah, it's like, like you are, you are setting the bar. It's all really like, it's amazing what it can do, but if you set the bar at 150 and it only hits 110, you've disappointed people.

Whereas actually exactly. My, it's just a general kind of approach to things. Like I'd rather under pitch slightly and hit, hit the target. 'cause it, it, a lot I see as well is, um, I've seen work in adoption where the knowledge worker kind of role uses it and it gives an imperfect answer, oh, I can't use this.

It's incorrect. It's like, well, yeah, that's kind of part of the, the, the thing here. Like it's got you 80% of the way there. It's not trying to get you. A hundred percent shouldn't be the goal. You have to be involved. 

Mary Jo Foley: Exactly. I think people were, were hoping, oh good, this can do my job for me, the parts of my job that are really boring and repetitive.

Right. Yeah. But no, you still have to check everything. Check the work, right. Yeah. 

Tom Arbuthnot: And have you seen age intake seems to be the push for 25, again, across the industry and Microsoft. Is it still early on those conversations? I know there's lots of licensing and governance and paper, you know, uh, like pay as you go, kind of models around that, that are quite complicated at the moment.

Mary Jo Foley: Yeah, I, I think people are a little bit worried on the agent front because it's not really clear when you use something like Microsoft 365 Copilot chat, and suddenly it's, it's suggesting you use an agent like suddenly it's like. Am I paying for this? Is it free? Yeah, it's not clear. Right. And I, I feel like, again, like you were saying, Microsoft's blurring the lines probably intentionally to try to entice people to try some of these ones that are not free.

But because, because of the pay as you go model and uh, is consumption based, it's risky, right? Because you don't know how your users are going to use that necessarily. And suddenly you get the bill and it's like, oh, wait a minute, wait a minute. 

Tom Arbuthnot: Yeah. 

Mary Jo Foley: Yeah. 

Tom Arbuthnot: Yeah, it's really interesting to see a couple of things I've seen over the last.

24 month is obviously Azure model and, and, and the cloud model. Cloud as a platform has always been, yeah, pay as you go. And then businesses have got used to that. 

Mary Jo Foley: Right? 

Tom Arbuthnot: But pay as you go in enterprise it is quite hard because they're trying to work to a budget, not a variable. So that's one. And the other one that's interesting is how much is shipping turned on now?

Like, right. It definitely used to be everything was off. And then Admin, please turn it off if you want. Now it's, it's on, you've got 30 days to flick this switch before it, it launches or before you know it, your users are using it. 

Mary Jo Foley: Exactly. Yeah. That's a big risk. Right? Um, sometimes you don't even know it's pa it's turned on when it ships to you and suddenly it's like, oh, this is on.

Wait a minute, we should ship this off. Yeah. You got a support ticket about how do I 

Tom Arbuthnot: use agents? So what, we've got agents now. 

Mary Jo Foley: Yeah, yeah. Uh, especially now that agents are, um, showing up in teams. Right. And your organization's probably wondering like, okay, I see an agent, maybe it would be useful, but am I paying for this and how am I paying for it?

Right. Yeah. I think the, the one that's really. Kind of flummoxed a lot of customers of ours is security Copilot, because with that one, Microsoft introduced a whole new pricing model around their made up metric of security compute unit. And people didn't know what that was. And Microsoft, all Microsoft would say is, we recommend you start with three.

And then when people saw how much that costs per month, they were like, wait, I, I don't know if I'm ready for this. Right. And I think, I think. They had to do something. Microsoft had to do something to offset the cost of this. Yeah. But I also think it was very vague how the pricing and licensing model on that worked and it made people a little more reticent to even do a pilot because they're like, I don't know what this SCU thing is over here, but I see there's overage, SEU or, and understanding 

Tom Arbuthnot: how that scales, like I'd say I do a pilot and it's great and it costs me.

$5,000 for the month. Yeah. Well that doesn't mean it's gonna cost $5,000 the next month necessarily, depending on how the model is, so, yeah, that's right. I think it's, uh, it, it, it's interesting because Microsoft obviously are investing literal, you know, billions into the data centers. There's going to be a need to recoup that.

And we're kind of at this, this, this, this road now of how much is fixed cost, how much is pay as you go. And I think it's a, it's gonna be an ongoing conversation as it, as it models out how. How it's charged for and how the value seem. 

Mary Jo Foley: Definitely. And I think customers who we, we see this a lot like customers who say they have an E five skew of something.

They assume that means they get everything, which it doesn't. Yeah, right. Like there's a whole bunch of add-ons, especially around agents that are not included in your license that you're gonna pay extra for per user, per month. And I think getting their minds wrapped around that, like, oh, I have E5 so I get everything.

It's not true. Right. 

Tom Arbuthnot: Yeah. Yeah. There's definitely a job to do, uh, both to understand that and to now optimize that spend. You got Copilot on M three, Copilot on top Immediate. $30, like potentially some of the, the, the power bi, you know, fancy staff, right. Potentially teams premium. Yeah. It stacks up really fast.

Mary Jo Foley: It does, it definitely does. And I think people are just gonna have to do trials in their organization where not everybody gets Microsoft 365 Copilot. We even did that at Directions. Like not every single person here Got it. Because they wanted to see like, what does our usage look like and who's using it?

And if someone got a license in it, they're not using it, let's reassign the license. Um, and I think even with Copilot chat, you're gonna have that, like, it's kind of like the freemium tier, right? It's something everybody could try. And then you can see who needs something more than what's available in chat.

And maybe you upgrade those. That subgroup of people, um, to the full license. Right? 

Tom Arbuthnot: Yeah, there's definitely, uh, from the data I've seen, there's definitely a need for adoption. Like there, there's obviously in every organization and in all walks life, there's some early adopters who lean forward who are trying things, but to get the mainstream users to get value out of it, it's not just give them the license to go.

And it's such a, it's such a new way of en engaging content. It's, and I think that's maybe where Microsoft are excited about agents because it has the potential to start. Doing some routine tasks over and over and driving value for the business without this, this kind of getting people over the hurdle of using AI.

Mary Jo Foley: Right. I know the, the whole idea of this changes the way you work, right? Like the way you work now, if you wanna incorporate, I. Copilots and agents into your workflow, you're gonna have to change how you work to make it really work for you. Right? And nobody wants to change the way they work, right? Like people get RUS and habits outside of technology.

Tom Arbuthnot: We all, we all think everybody does. 'cause we're like, yeah, we're excited. You must be excited. It's, no, 

I'm 

busy, 

Mary Jo Foley: right? I know I still use Notepad as my main thing that I write with. Right. And when Copilot for Notepad came out, I'm like, I don't want this right. I want, I don't want 

Tom Arbuthnot: that. It, it made me laugh so much.

I immediately thought of you. And that was true. It's like, I mean, uh, Paul did a whole uh, session on the podcast, on his podcast where he was talking about like, they're doing it in a very subtle, you don't have to turn it on like protective way. Um, but yeah, there's no escape. Is there? 

Mary Jo Foley: No, there isn't. And I am like, I don't want, I don't want the Copilot telling me to rephrase this.

I wanna write it the way I wanna write it. Right. Yeah. 

Tom Arbuthnot: Awesome. Well thanks so much for being on the show, Mary Jo. It's really nice to talk. Yeah, thanks for, for those that wanna know more about Directions on Microsoft or yourself, like how, what's the best way to reach out and find out more. 

Mary Jo Foley: Great. So if you wanna find out about Directions on Microsoft, we have a really easy URL directionsonmicrosoft.com.

We have all our information up there about our licensing bootcamps, our advisory services for customers, and how you can become a member and get our analyst reports that come out all the time. We also have free blogs and free podcasts, even if you're not a member, so you can get all of that on that website.

And as far as contacting me, I'm on X and I'm on Blue Sky, so I'm Mary Jo Foley. On both, so. Awesome. Yeah, I 

Tom Arbuthnot: definitely recommend your, your, the podcast is great and the blog. Thanks. So yeah, if you're, if you're in our space, that's another, a good feed to follow, just to keep you on top of the, uh, the enterprise news and some, some good perspectives from that team.

Mary Jo Foley: Oh, thanks Tom. Yeah, it was really great to be on the show. I'm, I was excited I got asked, so thank you very much. 

Tom Arbuthnot: No, it's nice. We'll do it again soon. Thanks so much. 

Okay.