Microsoft launches M365 Copilot updates for Biz Apps and Cowork, E7 AI-focused license combo

An “interface layer shift” is coming to business applications, Microsoft believes, and M365 Copilot will be that interactive workspace. The company announced that new capabilities will allow users to interact with Dynamics 365 Sales, Customer Service, Power Apps , and partner apps conversationally via the Microsoft 365 Copilot interface.

“Instead of switching between applications, users state what they need in Copilot and the system responds. You can review data and take action without leaving the conversation. Copilot becomes the place where work gets done,” wrote Microsoft CVP Bryan Goode. 

For Power Apps, this capability will reach public preview later in March, and availability for Dynamics 365 Sales and Dynamics 365 Customer Service will launch in early April 2026, according to Goode.

Microsoft is also announcing a range of partner applications that will work with M365 Copilot in this way, though not related to Power Apps or D365 apps. They include Adobe Express, Adobe Acrobat, Base44, Box, Canva, Coursera, Figma, Miro, Monday.com, Optimizely, and Wix. Partner app experiences will be accessible via the Microsoft 365 Agent Store for users with Microsoft 365 Copilot.

Examples of this kind of interaction paradigm within M365 Copilot, as provided by Microsoft, include: 

• A human resources team calling on their custom HR app, built with Power Apps, to compile a list of office locations with the highest new hire counts this quarter, viewing the results in an organized table with filter options.
• A customer service representative reviewing a summary of priority cases they need to focus on, with view and update permissions

Microsoft has recently made other efforts to draw D365 and Power Platform closer to Copilot, such as the launch of MCP servers for Dataverse, Power Apps, and D365 apps.

Microsoft also wants Dynamics 365 and Power Apps users to interact with M365 Copilot from within their native apps to get answers to questions that span the current app and their broader M365 data. Microsoft Work IQ will connect these elements to offer “the full context of the business,” the company says.

WorkIQ, which will be part of Wave 3 of M365 Copilot, is also key to another Microsoft announcement today, Copilot Cowork. While still in Research Preview, Microsoft president of Business Applications and Agents Charles Lamanna wrote that Cowork “draws on signals across Outlook, Teams, Excel, and the rest of Microsoft 365 so it can act with the same understanding you bring to your job.”

The technology comes from a partnership with Anthropic to integrate the technology behind Claude Cowork with M365 Copilot. 

Copilot Cowork can take on tasks from a human like rescheduling meetings based on new priorities, building meeting packets based on messages, meetings, and files, or do research using internal and external sources. 

Lamanna credited Microsoft’s ability to work with different AI firms and models, writing, “It is this multi-model advantage that makes Copilot different. Your work is not limited by one brand of models. Copilot hosts the best innovation from across the industry and chooses the right model for the job regardless of who built it.”

Microsoft also announced that its new Microsoft 365 E7 license will launch on May 1 for $99 per user. Known as “The Frontier Suite”, this license will combine Microsoft 365 E5, Microsoft 365 Copilot and Agent 365 along with Work IQ. It also includes Microsoft Entra Suite and advanced Defender, Intune and Purview security capabilities. 

And Agent 365 will launch at $15 per user as the central tool of observation, governance, management, and security of agents. Microsoft commercial CEO Judson Althoff wrote:

We are seeing tremendous momentum with our preview customers. In just two months, tens of millions of agents have appeared in the Agent 365 Registry. We have tens of thousands of customers that are already adopting Agent 365 to securely govern and scale AI agents across enterprise workflows.

Microsoft is watching over 500,000 agents internally through Agent 365, Althoff added.