Explainer
Agents are the part of Microsoft Copilot that can carry out tasks rather than just answer questions. Here is the difference between the types of agent, how they are billed and the controls to put in place before staff build their own.
By Christopher Fagan, Managing Partner, PEF Consulting Partners
Microsoft describes agents as specialised AI assistants that can take actions, such as sending emails or updating records. An agent combines instructions, knowledge sources and actions, and runs inside Microsoft 365 Copilot, Teams or a website.
| Type | What it is | Example |
|---|---|---|
| Prebuilt agents | Agents Microsoft provides, such as Researcher for deep research and Analyst for data analysis | Available to licensed users with a monthly allowance of combined queries |
| Declarative agents | Agents you configure with your own instructions, knowledge and actions, running on Copilot’s own models | A policy assistant grounded in your HR SharePoint site |
| Custom engine agents | Agents that bring their own orchestration and models, hosted outside Copilot | A specialist agent built in Azure for a line of business process |
| Copilot Cowork | Long running, multistep tasks across tools, billed per task | Preparing a monthly pack from several sources |
As agents multiply, Microsoft sells Agent 365, a control plane to observe, secure and govern agents, at £11.50 per user per month on an annual plan. Whatever tools you use, the governance questions are the same: who can build and publish agents, what data they can reach, who approves actions that change records, and how they are monitored.
Related reading: Copilot consultancy and agent build, how much Microsoft Copilot costs in the UK, agentic AI vs generative AI, a practical AI governance framework, the AI policy template.
AI assistants inside Microsoft Copilot that are set up for a specific job, with their own instructions, knowledge sources and permitted actions, such as answering HR questions or updating a record.
Employee facing agents are included for staff with a Microsoft 365 Copilot licence, within fair use. Other use, such as agents for customers or grounded agents used through free Copilot Chat, consumes paid Copilot Credits.
Copilot Studio is the tool for building and managing agents, and the way agent usage is metered. Agents are what you build with it, or the prebuilt ones Microsoft provides.
Microsoft’s control plane for agents, generally available since May 2026, used to observe, secure and govern agents across Microsoft and partner platforms.
If staff are already building agents, put the governance in place now. It is far easier than finding and fixing them later.