The Microsoft 365 Copilot launch was a total disaster

You’d think that Microsoft’s marketing team would have learned something after last year’s shambolic rollout of the Recall feature. Maybe, before trying another rollout, they might talk to a few customers, do some focus groups, even ask a few members of the press and analyst community for their advice.

But no.

Shortly after the New Year, someone in Redmond pushed a button that raised the price of its popular (84 million paid subscribers worldwide!) Microsoft 365 product. You know, the one that used to be called Microsoft Office? Yeah, well, now it’s called Microsoft 365 Copilot, and you’re going to be paying at least 30% more for that subscription starting with your next bill.

As far as I can tell, the response from customers has been overwhelmingly negative. I monitor Microsoft-focused online forums obsessively, and I read hundreds of complaints without seeing a single compliment. Seriously, the reaction to this rollout was an Excel #DIV/0 error.

What went wrong? Where do I begin?

They botched the price increase

Let me bend over backward to Microsoft here. They launched Office 365 (which later became Microsoft 365 and is now Microsoft 365 Copilot) more than a dozen years ago, and in that time they have not raised the price once. In case you haven’t noticed, we are living through some inflationary times right now.

So, there was plenty of room for Microsoft to roll out a gentle price increase. “Hey y’all, we know this isn’t welcome news but we need to bump up the Microsoft 365 subscription price by two bucks a month. It’s still a great deal!”

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Netflix does that every year or two and no one shows up at Netflix HQ with pitchforks and torches.

But no. Instead, they made it a 30% price increase and blamed it all on artificial intelligence. Bad idea. Why? Because…

No one wants to pay for AI

There’s a ton of potential in AI, and it has some solid use cases today, for tasks like writing code and finding patterns in large databases.

But in the places where Microsoft 365 Family and Personal subscribers are likely to see AI, the edges are still very, very rough. If you ask Copilot in Word to write something for you, the results will be about what you’d expect from an enthusiastic summer intern. You might fare better if you ask Copilot to turn a folder full of photos into a PowerPoint presentation. But is that task really such a challenge?

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To top that off, there are similarly rough edges in the way the Copilot features are implemented. For example, I have both work and family subscriptions to Microsoft 365. This combination normally works very well; I can sign in with one account, attach resources like OneDrive from both accounts, and work with almost no friction.

But good luck doing the same with Copilot features. In that configuration, I consistently get error messages telling me, “As a Microsoft 365 Personal or Family subscriber, you’ll be able to use Copilot when you’re signed with your Microsoft work or school account (Entra ID) and Microsoft personal account. However, that ability is not yet available.”

Let me see if I understand this: I’m paying Microsoft for not one but two subscriptions, and they raised the price of one of those subscriptions while not allowing me to use its signature feature. That seems like a lousy way to reward your best customers.

The announcement was bungled, too

I pay annually for my Microsoft 365 Family subscription. The price went up more than a week ago, but I haven’t received an email telling me about it. As the account manager, I should see that notice before I see the new price in my dashboard.

Instead, I learned about the new price thanks to a pop-up message on my Android phone.

That notice tells me I have a monthly plan. No, I have an annual plan that will renew in a month or two. It says I can cancel billing in my Play Store settings. No, I can’t. I bought this subscription using the web browser on my Windows PC, and when I tap the Subscriptions button in the Android app it opens a web browser and takes me to my Microsoft account page, where there’s no cancel option.

It could be worse, I suppose. Just ask the French and Spanish subscribers who got a similar pop-up message telling them their price had gone from €10 a month to €13,000. (Those pesky decimals.)

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Oh, and I’ve lost count of the number of people who were baffled and angry that Microsoft had forcibly installed the Copilot app on their devices. It was just a rebranding of the old Microsoft 365 app with the new name and logo, but in my case it was days later before I received yet another pop-up message telling me about the change.

Well, surely you can just turn it off. Right?

The smartest thing Microsoft could have done was to make this initial release of Copilot an opt-in feature for a few months. They could have said, “We’re excited to let everyone try this! Just click OK here!”

Instead, they turned the feature on for everyone and gave Word users a well-hidden checkbox that reads Enable Copilot. The feature is on by default, so you have to clear the checkbox to make it go away.

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As for the other Office apps? “Uh, we’ll get around to giving you a button to turn it off next month. Maybe.”

Seriously, the support page that explains where you can find that box in Word says, “We’re working on adding the Enable Copilot checkbox to Excel, OneNote, and PowerPoint on Windows devices and to Excel and PowerPoint on Mac devices. That is tentatively scheduled to happen in February 2025.”

Meanwhile, maybe think twice about using the option to disable all of the connected features in your Office apps. As one writer pointed out (with multiple swear words and some threats aimed in the general direction of One Microsoft Way), doing so can have unintended consequences, like making it appear as though all your files in OneDrive have suddenly disappeared.

How long will the Classic option last?

If you try to cancel Microsoft 365 to avoid the price increase (or just to say no to the AI features), Microsoft’s subscription management page offers the option to downgrade to a Classic plan, which turns out to be exactly what you signed up for not that long ago, minus the price increase.

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That’s purely a retention play, of course. New subscribers can’t sign up for this plan, and I expect that it will be discontinued in a year or two. 

Why is Microsoft doing this?

I have yet to see a single person praising the implementation of Copilot in Microsoft 365 or telling Satya Nadella they’ve gotten their money’s worth out of this unexpected upgrade.

So why do it at all? I can think of 3 billion reasons. I could plug the numbers into Excel and tell you about it, but let’s have Copilot explain instead.

Microsoft is halfway through its 2026 fiscal year. It’s almost like someone was given instructions at the end of the calendar year to bump up that revenue line for the Office Consumer division.

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Here’s the funny thing: The price increase is so big that there will still be a huge positive impact even if 10% of Microsoft 365 Personal and Family customers cancel rather than pay the extra monthly fee. Copilot walked me through the math and concluded, “So, even with 10% of your customers canceling their subscriptions, you would still generate an additional $1.714 billion annually due to the price hike. How do you feel about this adjustment?”

I feel like I understand why all those complaints are going to go unheard.