This blog was written as a follow up to my conversation with Pat Petersen. Check out our conversation here.
The All-You-Can-Eat Buffet Is Over
If you’ve been using Microsoft Copilot Cowork, you’ve likely noticed a shift. As Cowork moves out of its frontier preview and into general availability, the unlimited usage model is going away — and usage-based billing is taking its place.
What does that mean for you? If you don’t take action to set up usage-based billing, your users could lose access to Cowork entirely. So whether you’re an IT admin, a licensing decision-maker, or someone championing AI adoption at your organization, this is your sign to get ahead of it.
Why Cost Management Matters Now
One of the biggest pieces of feedback we’ve heard from organizations is: “Why are there usage limits when there’s barely any visibility into what’s being consumed?”
It’s a fair question — and Microsoft is actively prioritizing that visibility. But the reality is, the billing limits are already in effect, and the best thing you can do right now is start putting governance in place today so you’re not caught off guard.
Setting Up Usage-Based Billing: A Quick Walkthrough
From the Microsoft 365 Admin Center, navigate to the Copilot panel on the left. You’ll see two key tabs:
- Cowork — Shows user-level activity like task counts (but limited usage detail here).
- Cost Management — This is where the real visibility lives, once billing is configured.
Here’s what to expect during setup:
- Select a billing method. You can use an existing Azure subscription, pay-as-you-go via credit card, or apply a prepaid credit pack.
- Set a monthly spending limit. Each credit equals roughly one penny (USD), so you can do the math to set a cap that works for your organization.
- Configure user and group access. This is where you define who the policy applies to — whether it’s all users, a specific group (like your Copilot champions), or individual power users.
- Turn on alerts. We highly recommend enabling spending alerts so admins are notified when consumption spikes. Trust us — it’s easy to burn through credits fast when Cowork is running wild.
💡 Not seeing the configuration page? If you’re seeing a message that says “Work with your CSP or licensing provider,” that means your billing setup needs to go through your partner.
What Does Real-World Usage Look Like?
We ran a one-hour Cowork training session internally, and the result? Just over 2,000 credits consumed — roughly $20. On a monthly basis, one active user consumed about 4,000 credits total.
When you think about it, $20–$25 per hour of Cowork usage is competitive with the cost of having an actual coworker assist you with the same tasks. That’s a powerful value story — especially when you’re building the case for continued investment.
The Bigger Picture: Don’t Skip Change Management!
Here’s where we see a lot of organizations stumble. People get excited about what Cowork can do, and they skip the fundamentals of how we traditionally roll out technology:
- Start with a small group of power users.
- Identify high-value use cases from that group.
- Scale those use cases across the organization.
This approach ensures you’re maximizing value from the tool — and making the cost justifiable to leadership.
What’s Next?
This is Part 1 of a three-part series. Coming up:
- Part 2: How does Cowork’s cost compare to other AI tools (like Claude)?
- Part 3: Upskilling and enablement strategies to drive adoption the right way.
Stay tuned — and in the meantime, go set up your cost management. Your future self will thank you!