Hi and welcome back to the podcast. This is the audio of my monthly Teams update. Everything you need to know in under 15 minutes. If you want to see the full video and slides, you can catch over on LinkedIn or X or on Empowering Cloud along with the full PowerPoint deck and all the links. Hope you find it useful.

On with the show. 

Tom Arbuthnot: Hi and welcome

Hi, and welcome to the Microsoft 365 Enterprise Update. We've had Microsoft's end of financial year. There is a lot to talk about, including OpenAI now being a sub-pro service Hi, and welcome to the Microsoft 365 Enterprise update. We've had Microsoft's end of year. There is a lot to talk about, including OpenAI now being a sub-processor in Microsoft 365, Microsoft's end of year numbers and their trajectory for their new financial year, including thirty million Copilot seats and a massive Azure revenue increase.

Also, some important MFA changes. The fact that all the AI frontier houses want to be in the Office apps now, and a new certification program for Teams phone voice agents as well. First up, biggest news if you're an Enterprise customer is to have a look at OpenAI and its new sub-processor agreement in Microsoft 365.

Basically, Microsoft have moved to OpenAI being a sub-processor in Microsoft 365 Copilot. This is in MC one four two two o seven four. Um, if you haven't checked it out, it will be on by default enabled from the twenty-fourth of July. So if you have any considerations in your environment around where data is processed and how data is processed and the EU data boundary, do be sure to have a look at that message.

Many thanks to Landis, who are the benefactor of the community this month.

Really appreciate all their support. If you haven't seen the latest from them, be sure to check out their July update. They're doing a lot of development in their contact center and their attendant console and adding a lot of AI capabilities as well. Also, we're soon doing a bit of a unify contact center face-off between some of the top unified contact center solutions, so it'll be a live community event where we bring on different experts from the vendors to do demos and give their USPs for their contact center.

So be sure to look out for that soon. But many thanks to Landis for all their support. Microsoft gave us a new Copilot number. Copilot is now at thirty million seats, so a massive increase compared to where it was just a few months ago. Customers with fifty thousand plus seats raised seven x year over year, and apparently Copilot engagement is now on par with things like Outlook and Teams in terms of weekly engagement.

. Still a long way to go up to the four hundred and fifty million M365 users. Obviously, the M365 users have the Copilot free or included tier in their tenants,

but a lot of opportunity for Microsoft to further upsell customers but a loss of opportunity for Microsoft to further upsell customers to M365 Copilot. Also, Azure revenue rose massively, 43%, agent 365 has nearly 40 million agents registered across all customers, and GitHub Copilot is now at 50 million users.

So a really impressive end of year for Microsoft, the market's responded really strongly to the trajectory

And the market's responded really well to these results

We also got further confirmation that the Copilot Super App is coming this quarter. Nadella mentioned it in the earnings call. This is bringing together all the capabilities, Copilot Chat, Cowork, and GitHub Copilot and coding all into one app. Very much to a trajectory the other frontier houses have been on.

If you look at Claude, they brought Claude Code into that app, and similarly with OpenAI, they merged what was their Codex app and their ChatGPT app into GPT Work. GPT Work is a little bit of a confusing name. It sounds like ChatGPT for work, but really they're using Work in the same way Microsoft and Anthropic, are using Cowork.

So it's really about having an app that has agentic capabilities and coding capabilities built in. And OpenAI have said that this move already had them up to 10 million people using their

And OpenAI said this, this move had them already up to 10 million people using their agents. So Microsoft are making a similar move, trying to expand the capabilities to get them in front of more people

I'm really excited about this change, bringing agentic and coding capabilities to more users.

I'm sure it'll be really powerful, and looking forward to seeing more this quarter. We also got a lot more from Satya Nadella about Microsoft's AI strategy. The idea that Microsoft is going to be a multi-house environment in terms of offering frontier models, offering their own models, offering open-weight models, and really having Microsoft AI Foundry be a whole plethora of models available, and really separating which model you choose from which harness you use.

So Copilot is the harness, but multiple models may be available, or customers might build their own harness and pick and choose models from Microsoft AI Foundry. Microsoft also co-signed the NVIDIA-led open weights letter, which was basically saying essentially to the US government that all the big frontier houses, everybody involved with AI agrees that having open-weight models available is a good idea.

The only big house who didn't sign that letter was Anthropic, which is very interesting. Anthropic have very particular thinking about how AI should be controlled and who should have the power in AI. But pretty much everybody else in the industry, including OpenAI and Google, signed this letter saying, "Hey, we do need open-weight models.

We need options. We need competition." So that was really nice to see Microsoft, uh, being a co-sign on that, and indeed, Microsoft republished the whole letter. We are seeing Microsoft push on more with their own AI models as well, including a new security model. So they now have MAI Image 2.5 Pro and MAI Voice 2 Flash, and the argument here is that these are cost-efficient models, and they're reaching up to some of the capabilities of the frontier models in specific use cases.

we will see Microsoft pushing these models into more

We will see Microsoft pushing these models into Copilot and GitHub Copilot where the capabilities make sense from a cost to performance model

Another big AI announcement, Microsoft also announced they're putting, uh, billions into Minstrel Compute in Europe, so very much framed around sovereignty and regulated industries, and this is continuing that EU data boundary conversation, not just about where the model is hosted, but also which model it is.

So having an EU-born

And Minstrel is really m- and Minstrel is really the house that is the biggest play for a EU frontier level model, so nice to see Microsoft supporting that as well

If you missed this one, this is a really important one. Entra are going to move to passkeys by default. They're depreciating SMS and voice MFA. So it's been known for a while that SMS and voice MFA are not as secure as other options, and certainly not as secure as passkeys.

Passkeys might be a new paradigm for lots of enterprise users, though lots of consumer apps have been moving that way for a while. So be sure to check out these two message center items.

If you do have business reasons to keep going with voice and SMS MFA, you have to pick particular approved telecom providers from the Microsoft Security Store, which will be available from 30th October 2026.

A bit of a speed round now. Let's go through eight important Microsoft 365 Copilot up- A bit of a speed round now. Let's go through eight Microsoft 365 Copilot updates in 80 seconds. First off, we have Claude Opus now being available in Copilot. This is just another example of Microsoft bringing the latest models to Copilot as soon as they can.

This model has been reviewed pretty well. It's a bit token hungry, but it's up there in some of its capabilities. Certainly a big jump from Opus48

an important one for those managing Microsoft 365 Copilot. Copilot spending alerts recently got wiped. Microsoft made an update that changed how they work, and those have been removed. So if you were relying on those, you must get into the Microsoft Admin Center and reset those alerts. There's a Message Center there with more details, Computer use is coming to Microsoft Cowork. So in, in Frontier, this was in the research capability, and it was available to all users. This has now moved to Cowork, and therefore it has also moved to consumption. Not a huge surprise. , But this is another scenario where Frontier has some capabilities, and they change as they become generally available.

So Frontier

The Frontier Research version retired on the first of July. If you want to keep using Computer Use, then check it out in Cowork.

Microsoft 365 Admin Agent is now generally available.

I haven't had a chance to get hands-on with this, but I will do a video seeing how good it is. This allows you to manage users, licenses, service health, governance, troubleshooting. Does respect all the RBAC capabilities, obviously, of who's logged in, and this is native in the Microsoft Admin Center

Interesting one here from the PowerPoint team. The PowerPoint team are saving skills in OneDrive. So this is the idea of skills which are markdown files to do particular things. The The PowerPoint team are setting up so you can save your skills for PowerPoint in your personal OneDrive, and potentially share them and distribute them from OneDrive as well.

Notebooks are now in the Copilot app. They still sync with OneNote as well. This is rolling out early to mid-August.

The existing notebook experience in OneNote remains unchanged, but now they will be surfaced in the Copilot app as well

Copilot Mobile is getting the capability to record in-person meetings. We already had this in the Teams mobile app, but it was quite hard to discover the idea that for a full in-person meeting, you can bring out your mobile, hit record, and it will do the record and the transcription. This will be coming to the Copilot app, so it will audio record to the user's OneDrive.

It will do the transcription, and it will do the insights. I think this will be really good just to surface that capability.

And talking of meetings, Microsoft will have a new .meetings file being created for every meeting, and this is generated by AI, and it's kind of insights of the meeting saved as a text file stored in SharePoint. It's not user accessible. It can't be edited or modified, and the default retention is five years.

But if you do have concerns over data retention or storage or where it is or what it is, um, or any kind of AI data processing, check out MC1429018 for details of how you can change the retention or turn it on or turn it off. But this will be really useful for the AI tools to quickly give you insights into more of meetings by essentially creating a, a markdown summary of everything that happened in the meeting

. This is a really interesting one. A lot of the frontier houses have realized that enterprise is where a lot of the business value is in AI. Anthropic were kind of the first on this train Anthropic were kind of the first on this train pivoting to enterprise and others have followed.

And now you see Anthropic have further developed their M365 connector. They've created a single connector which has all the Office apps in. Um, Grok now has a plugin for Word and Excel and PowerPoint, and OpenAI also have Office plugins, so everybody wants to be in your Microsoft 365 Office apps.

Just be careful about governance and compliance and control. A lot of these are through official app store listings, so they can be gathered through the Microsoft App Store. So make sure your controls and compliance are aligned to what your users are using in the Office apps

This one's really exciting for me. This is Teams Phone Voice Agents, so we've got the official announcement that Teams Phone Voice Agents are in Frontier, and now Microsoft have begun to release details of a certification program for third parties who can extend that capability. AudioCodes with Voca CIC are the first to extend that capability and get certified.

I've just done a podcast with Gidi there that'll be coming out soon, going through details of what's native in Teams Phone Agent and what the certified ecosystem partners bring to the table, how they interconnect, how they work, and it's all tied into that unified contact center certification as well.

. Facilitate continues to get more powerful. Now Facilitate in meetings, if you allow it to, will listen in, and if a question is posed and nobody has a good answer, it will go off to the web and do a search and try to come up with the answer in the chat.

Uh, we've had this in a few of our internal meetings. Some people love it. Some people are a bit unsure about it. I'm really excited to see Facilitate move from just note-taking to be much more proactive in the meeting

Five Microsoft Teams updates in 50 seconds.

New Test Mic and Speaker button is available in the pre-join experience, so you could always test your mic and speaker by going into Settings, but the very time you want to test it is just before a meeting, so now there's one button to push on the pre-join screen to say, "Hey, quickly test my mic and speakers."

Really nice to see that. That is rolling out August. Join by code now needs owner approval, so you can join a team by a code. If you didn't know, you can share that code to join. For public teams, you would just auto join. For private teams, previously you would auto join. Now, as you'd expect, when the user has that code, it still queues up for approval with the team owner if it's a private team or private channel to make sure the owner wants that person to join

Consent notifications are coming to one-to-one calls. this is recording and transcription consent. This is recording and transcription. This is recording and transcription consent. We've had this in meetings for a while now. This will also be in one-to-one calls.

So with this policy, remote parties will have to agree to the recording of one-to-one calls or one-to-one sessions Federation controls are getting a lot stricter and a lot more slick. Federation generally is now unfortunately closed by default because it's, uh, obviously an attack vector for malicious actors.

Microsoft's doing some clever AI things to identify malicious Microsoft is doing some clever things with AI to try and identify malicious federated messages, but . There are a lot more granular controls coming to who you allow, who you don't allow, which people in the organization are allowed, and which people in the organization aren't allowed.

Passwordless Passwordless

A big one for security teams, A big one for security teams, passwordless room resource accounts are coming. So having passwords on those resource accounts has always been a bit of a sticking point. This will be rolling out between early and late August, and there are some manual migration steps. So talk to your Microsoft Teams team, your service owner there.

They do have to identify eligible accounts, they have to schedule migrations, and they have to execute them. So there is some lift here to do, but good news for security teams and Microsoft Teams Rooms If you haven't been on Empowering.Cloud recently, we have some great new content, lots of good podcasts.

We had Martin talking, we had Martin talking about Microsoft Places. We had a great conversation about Dynamics 365 Contact Center, and a really interesting conversation with Rishi at Logitech around where Microsoft are going with AI and how he thinks they're quietly winning AI in the enterprise.

That's it for this month. Hope that's been a useful update for you. We're taking a bit of an events break in August, as lots of people are on holiday, but we're back in September with Kim Matlock on Teams Fireside Chat. We have regular Microsoft Teams devices Ask Us Anything, the Microsoft Change Community Roundup, Copilot Fireside Chat.

And also we're gonna be kicking off with the in-person event, so I'll be talking at the Ribbon Insights event. We've got Collab Days in Bletchley Park and UCX London. Martin and myself will be talking on all Microsoft... Well, Martin and I... And at UCX London, and at UCXpro London, Martin Boehm and I will be talking about what's new in Copilot and Microsoft Teams.

And again, we'll be doing a private roundtable there, so if you're interested in joining a roundtable, let me know. Many thanks again to Landis, the benefactor this month. Really appreciate all their support and hope to see you at one of the events soon