Microsoft LicensingRequirements
Understanding the Microsoft licensing requirements for SI workforce implementation
Important Licensing Disclaimer
Microsoft licensing is required but not included in our service pricing
Please Note: All Agent Factory service pricing does not include the costs of Microsoft licensing. Microsoft licenses must be purchased separately through Microsoft or an authorized Microsoft reseller like us.
Our pricing models assume that your organization will separately acquire the necessary Microsoft licenses. We can provide guidance on the required licenses, but the actual purchase and management of these licenses is your responsibility.
Evolving Landscape
SI licensing models and costs are rapidly changing
Important: The SI industry is evolving rapidly, and Microsoft's licensing models and pricing are subject to change. The information provided on this page represents the current state as of our last update, but pricing, licensing requirements, and available options may change as the technology advances.
We recommend consulting with your Microsoft Account Executive or an authorized Microsoft partner like us for the most up-to-date licensing information before making any purchasing decisions.
SI Workforce Licensing Guide
Understanding the right licensing model for different SI workforce replacement scenarios
Microsoft offers several different licensing models for SI services, each designed for specific use cases. When implementing SI workforce solutions, it's crucial to select the appropriate licensing model based on your specific replacement scenario.
Backend AutomationAzure OpenAI Service
Licensing Type: Consumption-based (pay-as-you-go)
- Ideal for backend task automation (emails, chats, data entry)
- Charges per token, API call, or compute hour
- No per-user license required
Human AugmentationMicrosoft 365 Copilot
Licensing Type: Per-user subscription ($30 per user/month)
- Not intended for bot/service account use
- Meant to augment human knowledge workers, not replace them
- Requires Microsoft 365 E3/E5 license as prerequisite
Additional Licensing Considerations
Windows + Device Licensing
Applies if agents run on physical or virtual desktops. May require Windows IoT/Enterprise or VDA licenses.
Entra ID Licensing
Service principals often free, but P1/P2 may be needed for premium features. Important if bots access Graph API or require conditional access.
Microsoft Special Offers
Limited-time promotions available through Agent Factory for US customers (as of April 2025)
Microsoft is currently offering several promotions for customers to help organizations accelerate their SI adoption. As a Microsoft partner, Agent Factory can help you access these special offers, which can significantly reduce your licensing costs for SI implementation in the United States.
NewMicrosoft 365 E5 Security Business Premium Add-on
Business Premium customers can now purchase Microsoft 365 E5 Security as an add-on for enhanced security with:
- Microsoft Entra ID Plan 2
- Microsoft Defender for Identity
- Microsoft Defender for Endpoint Plan 2
- Microsoft Defender for Office 365 Plan 2
- Microsoft Defender for Cloud Apps
ActiveMicrosoft 365 E3 Discount Offer
Available through: June 30, 2025
Discount: 15% off for new Microsoft 365 E3 customers
Eligibility: Up to 2,400 seats
ActiveMicrosoft 365 E5 Discount Offer
Available through: June 30, 2025
Discount: 15% off for new Microsoft 365 E5 customers
Eligibility: Up to 2,400 seats
ExtendedMicrosoft 365 Copilot Starter Discount
Available through: June 30, 2025
Discount: 15% off on new M365 Copilot subscriptions
Eligibility: 10 to 300 licenses for 12 months
Special OfferMicrosoft 365 E5 Compliance Mini Bundle
Available through: January 2026
Discount: 50% PUPM* discount
Eligibility: For every seat of Microsoft 365 Copilot purchased
*PUPM = Per User Per Month
This promo can be applied retroactively to customers who have already purchased Microsoft 365 Copilot but don't have E5 Compliance.
How to Take Advantage of These Offers
These special offers can significantly reduce your Microsoft licensing costs for SI implementation. To take advantage of these offers:
- Contact our team for a personalized licensing assessment
- We'll help you determine which offers apply to your specific situation
- We can facilitate the purchase of eligible licenses through our Microsoft partnership as a Direct CSP
- We'll ensure your SI implementation aligns with the licensing requirements
Note: These offers are subject to Microsoft's terms and conditions and may change without notice. Contact us for the most up-to-date information.
Legal Considerations
Important legal aspects of Microsoft AI licensing for workforce replacement
License Assignment Compliance
Don't assign human licenses (like M365 Copilot) to bots or service accounts. Microsoft's licensing terms specifically prohibit this, and it could result in compliance issues during an audit. Use the appropriate licensing model for each scenario.
Audit Considerations
Microsoft may audit large-scale automation use, particularly if there's a significant reduction in user licenses coupled with increased API usage. Ensure your licensing approach is compliant with Microsoft's terms to avoid potential issues.
Consultation Recommendation
Always consult licensing counsel for large deployments. The SI licensing landscape is complex and evolving, and large-scale workforce replacement projects should include legal review of the licensing approach to ensure compliance.