Tag: Cowork

Copilot Cowork Just Hit GA — and CSP-Managed Tenants Are Hitting a Billing Wall

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Why “Your organization is managed by your solution provider” appears, why the customer’s own Azure subscription won’t save you, and the exact partner-side fix.

The symptom

Here’s a scenario that is going to land on a lot of MSP desks over the coming weeks. You have a client who has been happily using Microsoft 365 Copilot Cowork while it was in preview. They love it. They want to roll it out to more people. Then Cowork moves into General Availability, and suddenly they can’t add any new users to it. When they go digging in the Microsoft 365 admin centre, into the Copilot section to sort out billing, they are met with this brick wall:

The exact message

“Your organization is managed by your solution provider. Copilot credit setup for organizations managed by a solution provider must be set up by your provider. Contact your provider to enable consumption-based AI services for your organization.” The kicker is that this particular client already has a perfectly good pay-as-you-go Azure subscription sitting in their tenant. So the natural reaction is: I have an Azure subscription, I have billing, why is Microsoft telling me to phone a friend? The short version is that this is not a bug, it is not a permissions problem, and it is not something the client can click their way out of. It is a commerce-channel issue, and the resolution lives with whoever holds the CSP relationship — which, for most of us reading this, means it lives with us.

What actually changed at GA

When Cowork was in preview, the gloves were off — people could use it without the full commercial billing plumbing being in place. At GA, Microsoft moved Cowork behind what they call usage-based billing, powered by Copilot Credits. This is the same consumption model that sits alongside fixed per-user Copilot licensing. Worth noting precisely: as it stands today, this usage-based billing method only applies to Copilot Cowork and the Work IQ API — it is not the whole Copilot estate. Microsoft has said more agents and services will be folded into this model over time, but right now Cowork is the headline reason an MSP will trip over this.

How the new billing model is wired up

Usage-based billing is managed from a new node in the Microsoft 365 admin centre: Copilot, then Cost Management. That is where an admin activates a default spending policy, sets monthly and per-user spending limits, configures alert thresholds, and — critically — chooses a billing method. The billing method is an Azure subscription. Copilot Credits are drawn against that subscription on a pay-as-you-go basis (with optional pre-purchase plans layered on top for discounting, but ignore that for now). So the whole thing hinges on one question: which Azure subscription is allowed to be the billing method? And that is exactly where a CSP-managed tenant comes unstuck.

Why the client’s existing Azure subscription doesn’t help

This is the bit that catches people out, so it is worth being precise. The client genuinely has an Azure subscription. But the Copilot Cost Management setup, in a CSP-managed tenant, will not let them attach it — because that subscription is almost certainly on the wrong commerce channel. When a tenant is managed under the Cloud Solution Provider program, Microsoft routes all consumption commerce — Azure, marketplace, and now these AI services — through the partner’s Microsoft Partner Agreement billing account. A subscription the customer signed up for directly (a credit-card MOSP or direct Microsoft Customer Agreement Azure sub) is a completely separate billing relationship that the partner does not own. The commerce platform sees the tenant flag that says “this org is CSP-managed”, looks for a billing source on the partner channel, doesn’t find one, and throws up the “managed by your solution provider” gate. The presence of some other Azure subscription in the tenant is irrelevant to that check.

The mental model: who owns the commerce channel

If you keep one diagram in your head, make it this one. A CSP-managed customer’s consumption billing has to originate from an Azure plan that the partner provisions under their Microsoft Partner Agreement. The Azure plan gives the customer access to Azure services at pay-as-you-go rates under a Microsoft Customer Agreement, and the resulting Azure subscription lives in the customer tenant but invoices back to the partner. That partner-channel subscription is the only thing the Copilot Cost Management billing-method picker will accept for a CSP tenant. Here is how the three channels compare:

– Billing channel
– Who owns it
– Works as Cowork billing method in a CSP tenant?

Direct / MOSP Azure (customer’s own credit card)
The customer
No — wrong channel, not visible to the CSP gate

Direct Microsoft Customer Agreement (Azure direct)
The customer
No — tenant is flagged CSP-managed, so this is bypassed

Azure plan under Microsoft Partner Agreement (CSP)
The partner (you)
Yes — this is the channel the gate is looking for

The fix, step by step (partner side)

Assuming you are the CSP for this client, the resolution is to provision an Azure plan and an Azure subscription for them through the partner channel, then point Copilot Cost Management at it. Work through these in order:

  • Confirm the Microsoft Customer Agreement is accepted. In Partner Center, open Customers, select the customer, and check the Microsoft Customer Agreement status on their Account page. You cannot purchase an Azure plan until the MCA is in place — invite them to sign it directly with Microsoft if it isn’t.

  • Purchase the Azure plan. In Partner Center, with the customer selected, choose Add products, set Segment to Commercial, find Azure plan, add to cart, Review and Buy. If the customer already has an active Azure plan, skip to the next step.

  • Create an Azure subscription under that Azure plan. Sign in to the Azure portal with your Partner Center (Admin agent) credentials, making sure you are in your partner directory, not the customer’s. Go to Cost Management + Billing, pick the billing scope for the account where the customer sits, open Customers, select the customer, then All billing subscriptions, and choose Add. Pick a Usage based / Azure subscription with the plan set to Microsoft Azure Plan, then Review and create.

  • Lean on AOBO for the Azure rights. Subscriptions you create through CSP grant Admin-on-Behalf-of, which gives any Admin agent in your partner tenant Owner rights on that subscription automatically. That satisfies the setup wizard’s requirement for Owner or Contributor on the Azure subscription and resource group — no extra role assignment needed.

  • Configure usage-based billing in the customer’s M365 admin centre. Go to Copilot, then Cost Management, and select Get Started. In the Billing method section choose the new CSP Azure subscription. Set a sensible monthly spending limit, a per-user spending limit, and alert recipients and thresholds, then Activate. The Cowork block clears and you can add users again.

Prerequisites worth double-checking before you start

Setup will fail at the last hurdle if any of these are missing, so confirm them up front:

  • On the Microsoft 365 side, the person running the Cost Management setup needs Global administrator or Billing administrator. AI administrator and License administrator can create spending policies and manage limits, but they cannot set or change the billing method.

  • The tenant must have at least one SharePoint licence, or a licence that includes SharePoint. This is a real prerequisite for the Copilot billing node, and easy to overlook on a lean tenant.

  • You need Owner or Contributor on both the Azure subscription and a resource group in it. Via CSP and AOBO this is automatic, but if you have deliberately stripped AOBO and are using Lighthouse or directory accounts instead, make sure the identity doing the setup actually has those rights.

  • An Azure resource group must exist in the subscription — the wizard can create one for you during setup if needed.

Direct CSP vs indirect reseller — know which one you are

There is an important fork here. If you are a direct-bill CSP partner, you hold the Microsoft Partner Agreement billing account yourself and you run every step above in your own Partner Center. If you are an indirect reseller sitting underneath a distributor or indirect provider, you do not own that billing account — the Azure plan purchase is initiated through your indirect provider’s flow, not your own Partner Center billing scope. In that case you coordinate with your distributor to get the Azure plan provisioned, and then you can still handle the Azure subscription creation and the customer-side Cost Management configuration. And if it turns out a completely different provider holds the CSP relationship for this client, then none of this is yours to fix directly — that provider has to provision the Azure plan, or the CSP relationship needs to be transferred to you first.

Gotchas and things I’d watch

A few practical landmines that are easy to step on with this new model:

  • Budgets notify, they don’t stop. A budget on a billing policy triggers email alerts at the thresholds you set, but by default it does not enforce a hard cap or interrupt service. If you want a genuine ceiling, use the monthly spending limit and per-user limits in the Cost Management spending policy, which can actually cut access when hit.

  • Set a per-user limit on day one. The whole point of consumption billing is that a single enthusiastic user can run up real spend. The per-user monthly limit is optional in the wizard, but for an MSP managing someone else’s bill, treat it as mandatory.

  • Region selection is sticky. When you create the billing policy you choose a region that determines where tenant ID and usage data are stored, and you cannot edit the subscription or resource group tied to a policy afterwards. Get it right the first time.

  • Turning pay-as-you-go off is not instant. Disconnecting a service from a billing policy can take up to two hours to actually stop users, so don’t panic if access lingers briefly after you flip it off.

  • Pre-purchase plans layer on top, they are not an either/or. If cost predictability matters, a Copilot Credit pre-purchase plan gives discounted credits that are consumed first, with pay-as-you-go catching any overage. You don’t have to choose one or the other.

The takeaway

This is going to be a recurring support ticket. Cowork going GA is good news, but the GA billing model assumes the customer can attach their own Azure subscription — and for CSP-managed tenants that assumption simply doesn’t hold, no matter how many Azure subscriptions are already sitting in the tenant. The fix is entirely on the partner side: provision an Azure plan and subscription through the CSP channel, then point Copilot Cost Management at it. If you manage Microsoft 365 customers through CSP and any of them are using Cowork, get ahead of this now, because the moment GA flips the billing requirement on, their ability to add users stops until you’ve done the plumbing. As always, plan it, test it on one tenant, and document the steps so your L1 team can repeat them.

Can MSPs Actually Bill for Copilot Cowork?

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I’ve been mulling over a question that doesn’t get asked enough, and I think it deserves a hard look: when Copilot Cowork lands with pay-as-you-go billing, do small and midsize MSPs actually have the skills to handle it? Not the product. The billing. Because from where I sit, that’s the part most of us are least prepared for.

For years, the SMB MSP model has run on something beautifully predictable: per-seat licensing. A client has thirty users, you sell thirty licences, you mark them up, and everyone knows what next month’s invoice looks like before it arrives. That predictability is the whole foundation. It’s what lets you quote a managed services agreement with a straight face. Consumption billing pulls that foundation out from under you.

We’ve Never Had to Read This Kind of Meter

PAYG is a different animal. Usage goes up and down. Costs follow. Suddenly you’re not selling a fixed thing, you’re selling access to a meter that ticks based on what people actually do inside Copilot. And here’s the uncomfortable truth — most of us have never had to read a meter like this before. We don’t have the muscle for it.

Think about the questions a client will ask the moment their first variable bill arrives. Why was it higher this month? Which users drove that? Was it worth it? If your answer is a shrug and a forwarded Microsoft invoice, you’ve got a problem. You need to pull the usage data, make sense of it, and explain it in plain English. That’s not a skill most SMB MSPs have built, because we’ve never needed it.

Configuring It Is the Easy Part

Turning Copilot Cowork on through the admin centre isn’t the hard bit. Microsoft will make that straightforward enough. The hard bit is everything that wraps around it — setting spending limits so a client doesn’t get a nasty surprise, deciding who gets access, and putting guardrails in place before usage runs away from you.

Then comes reporting, which is where I think the real gap shows. Can you stand in front of a client at the monthly meeting and show them, clearly, what they consumed and what they got for it? You’ll be living in the Microsoft 365 admin centre and the usage reports, and you may well end up pulling that data into Excel — perhaps asking Copilot itself to summarise the month’s consumption into something a business owner can read in thirty seconds. If you can’t produce that story, the client will assume the worst.

This Is a Discipline We Have to Learn

What worries me isn’t the technology. It’s that consumption billing is a genuine discipline, and it’s one the SMB MSP world has largely skipped. The cloud providers have been doing variable billing for years. Most of us serving small business have not. We’ve been comfortable in fixed-price land, and Cowork is going to ask us to grow up fast.

So I’d put the question back to you honestly. Could your business take on a client with Copilot Cowork tomorrow, configure it sensibly, manage the spend, and report on it with confidence? If there’s hesitation in that answer, you’re not behind — you’re normal. But the MSPs who close that gap early, who learn to read the meter and tell the story, are the ones who’ll own this conversation. The rest will be forwarding invoices and hoping nobody asks why.

Need to Know podcast–Episode 367

This episode ultimately reflects on how organisations must adapt to an environment where solutions are no longer neatly balanced between simplicity and capability. Instead, businesses need to reassess priorities, stay informed, and make deliberate choices about which innovations deliver real value. For SMBs, the challenge is not just keeping up—but identifying what’s truly “good enough” in an increasingly complex cloud-first world.

Brought to you by www.ciaopspatron.com

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Copilot Credit Pre-Purchase Plans

Ok, deep breath before we start. In. Out. Let’s start.

If you want to purchase Copilot Credits for use with Cowork you’’ll need access to https://admin.microsoft.com. Then you’ll need to navigate to Copilot | Cost Management | Configuration. You’ll then need to select Buy prepaid credits.  Then you need to select a Subscription, then How many credits you want from the table that displays.

Upon selection, you’ll be shown the price and then you can pay via the Checkout.

If you look closely you’ll also see this.

So, billing is measured in CCCUs. 1 x CCCU = 100 credits. CCCU means Copilot Credit Commit Unit.

Given that this PAYG style billing is applied against an existing Azure subscription, if you go into the Azure portal and locate Reservations you find another location where you can pay:

Again, here, we have Copilot Credit Pre-Purchase Plans measured in CCCUs.

At the lowest prepaid tier you get 5% discount and at the pre-paid top tier you get a 20% discount, with remaining tiers in between these two. Any overage returns to be being billed with no discount at the base rate.

If you now look at how usage is reported, you see it is reported in Copilot Credits, not CCCUs. So CCCUs appear to be a billing construct only.

Thus, if we focus on just the Copilot Credits (not CCCUs) we get the Microsoft quoted US$0.01 per Copilot Credit. Thus, the above consumption cost becomes 1,574 x US$0.01 = US$15.74 in real money.

Thus, to enable Copilot Cowork going forward you will need:

– M365 License (e.g. M365 Business Premium)

– M365 Copilot license (to enable premium Copilot capabilities like Cowork)

– An Azure subscription for Copilot Cowork to be billed against

– Cowork consumption and billing is tenant wide, not per user

That will bill Copilot Cowork at a PAYG rate of $0.01 per Copilot Credit. A simple average would be to assume each Cowork interaction will consume around 400 credits. That is, around US$4 every time ANY user uses Cowork. This is because Cowork interactions vary on how many credits they use based on their complexity of the request and actions taken.

You can pre-purchase Copilot Cowork credits at average discounted rates starting from US$0.0095 down to $0.0080 (i.e. 5 – 20% discount) for a fixed annual commitment.

Annual pre-paid Copilot Cowork credits are measured in Copilot Credit Commit Units (CCCUs) which have the ratio of 100 credits per 1 CCCU. The entry level CCCU is 3,000 which provides 300,000 credits across all users in the tenant.

These credits can be purchased from the M365 admin portal or the Azure portal (vis Reservations).

An administrator can restrict Copilot Cowork in various ways to control costs but that is the subject for additional post.

….. and we are done. Breath. In. Out.

The Conversation I Keep Having About Copilot

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Last week a manager asked me how to write the perfect prompt. She had a sticky note on her monitor with about thirty bracketed placeholders and a warning to always start with role, then context, then task. I asked her how often she actually used it. She laughed and said almost never — it felt like homework before the real work could start.

That moment captured something I’ve been thinking about for a while. The industry has spent two years training people to be better prompters, when the real productivity gains sit one layer up. With Copilot Cowork, the unit of leverage isn’t the prompt — it’s the skill.

Prompts Are Disposable. Skills Compound.

A prompt is a single instruction. You type it, you get something back, and then it’s gone. Tomorrow morning you start again. Even a brilliantly worded prompt only helps the person who wrote it, on the day they wrote it, for the task in front of them.

A Copilot Cowork skill is different. It’s a packaged way of working — a brief, a checklist, a structure, a tone — that anyone in your organisation can invoke by name. Once it exists, it doesn’t degrade. It doesn’t get lost in someone’s chat history. It runs the same way on a Tuesday morning as it does on a Friday afternoon, and it carries the thinking of whoever built it forward into every future use.

That is leverage. Prompt engineering is a craft. Skills are an asset.

Where the Productivity Actually Lives

The real productivity question in any business isn’t how do I get a better answer from Copilot today — it’s how do we stop solving the same problem from scratch every time. Skills are the answer to that question.

Think about what happens in a typical week. Someone needs to write a board update. Someone else has to brief a meeting. A third person is drafting a proposal that looks suspiciously like the last three proposals. In a prompt-engineering world, each of those people opens Copilot in Word or Outlook and tries to remember the magic incantation. In a skills world, they invoke a Board Update skill or a Meeting Brief skill and Copilot already knows the structure, the voice, the sources to pull from in SharePoint, and the people in Teams who usually need looping in.

The hours saved aren’t in the typing. They’re in not having to think the problem through again, hunt for the right template, or remember which version of the prompt actually worked last time.

The Shift Business Leaders Need to Make

If you’re leading a team, the question worth asking isn’t are my people good at prompts? It’s what work do we do over and over that should be a skill by now? The recurring report. The standard reply. The new-client onboarding sequence. The monthly review pack assembled from Excel, Outlook and a SharePoint folder no one can quite remember the path to.

Each of those is a skill waiting to exist. And the moment it does, the productivity gain isn’t a one-off — it accrues every time anyone in the business uses it.

What I’m Watching

I think the businesses that win the next stretch with Copilot won’t be the ones with the cleverest prompters. They’ll be the ones who treat their best ways of working as something to package, name, and share. Prompt engineering helps one person, once. A well-built skill helps the whole organisation, every time. That’s where the productivity actually shows up.

Need to Know podcast–Episode 365

In this episode, we dig into Cowork Skills and why they represent a genuine shift from “AI as a novelty” to “AI as part of how work actually gets done.” Not more prompts. Not more tools. But fewer decisions, less friction, and more consistency across the business.
If you’ve ever thought “Copilot is interesting, but it’s not really embedded yet”, this episode is for you.

Brought to you by www.ciaopspatron.com

you can listen directly to this episode at:

https://ciaops.podbean.com/e/episode-365-skills-not-apps/

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Claude Cowork vs Copilot Cowork: why the Microsoft answer wins for SMB

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I’ve watched a lot of clients spend the last twelve months stitching together AI tools that don’t talk to each other. A Claude tab here. A ChatGPT tab there. A Copilot tab somewhere in the middle. Then a folder of CSVs they keep dragging in and out of each one.

That’s not a workflow. That’s a tax.

So when Anthropic shipped Claude Cowork and Microsoft shipped Copilot Cowork in roughly the same window, the question landed in my inbox: which one do we tell our clients to use?

I’ll save you the suspense. For an SMB already paying for Microsoft 365, it’s not close.

What is Cowork, really?

Cowork is the bit that does the work, not the bit that talks about it. You give it an outcome — “draft the quarterly update from these meeting notes and send it to the leadership team” — and it goes off and does the thing.

That’s the shared idea. Both products own it. The split is in where the work happens.

Claude Cowork lives on your desktop. You mount a folder, drop your files in, and Claude runs in a sandbox on your machine. It doesn’t see your inbox. It doesn’t see your calendar. It doesn’t see your Teams chats unless you’ve copy-pasted them in. You bring the data to the model.

Copilot Cowork is the inverse. It already lives inside Microsoft 365, grounded in your Outlook, Teams, SharePoint, OneDrive, and calendar through Work IQ. You don’t mount anything. The model is already where your data lives.

Notice what’s missing? The mounting step. The “let me copy this folder over” step. The “hang on, I need to paste in the email thread” step.

For SMBs, that’s the whole game.

Step-by-Step: getting Copilot Cowork going

If you’re licensed for Microsoft 365 Copilot and enrolled in the Frontier preview, the start is short.

Open Cowork in Microsoft 365

Browse to m365.cloud.microsoft, sign in, and pick Cowork from the agent list. If you don’t see it, check Frontier enrolment under Copilot settings.

Describe the outcome

Skip the prompt-engineering nonsense. Talk like a person.

Read my inbox from this week, find anything tagged from a client,
draft a Friday wrap-up email summarising open items, and post a
short version into the Operations channel in Teams.

Notice what’s missing? Any reference to a file path. Any “first export your inbox to CSV” step. Cowork already has the inbox, the calendar, the Teams channels, and the SharePoint files. It just needs the instruction.

Approve the action

Cowork shows you exactly what it’s about to send, post, or schedule before it does it. You hit Send, Post, or Cancel. The full flow is in the getting started doc if you want to walk a client through it.

Set the schedule

Want it to do this every Friday at 4pm? Schedule the prompt and walk away. Copilot doesn’t get tired. Use that.

Why this actually changes behaviour

Claude Cowork is a beautifully built tool. For a developer or a data analyst on a Mac with a folder full of CSVs, it sings. I’m not knocking it.

But that’s not the SMB picture. The SMB picture is a bookkeeper, a sales lead and a director who all live inside Outlook and Teams from 8am to 6pm. Their data isn’t in a folder on their desktop. It’s in their mailbox, their channel chats, their SharePoint sites and their meeting transcripts.

“But couldn’t we just pipe our M365 data into Claude?”

You could. You’d be paying twice — once for M365, once for Claude — and you’d be exporting business data into a different vendor’s environment to do work the platform you already own can do natively.

That’s not a productivity gain. That’s a procurement problem.

Here’s the real win. Copilot Cowork sits behind the same Entra identity, the same conditional access, the same Purview labels and the same retention policies your tenant already runs. The governance story is already built. There’s no second tool to license, secure, train, or audit.

My recommendation? If you’re an MSP and you’re not walking your SMB clients through Copilot Cowork, you’re leaving value on the table — theirs and yours.

Meet people where they already are.

Cowork isn’t a second AI app for your clients to learn. It’s the work, finally getting done in the place it was always supposed to happen.