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“Our expectation is that it will provide a combination of user-like access to Microsoft 365 services on a monthly/annual/3-annual fee basis plus the core functionality of M365 Copilot. Additional AI use will be charged in the same manner as with users — prepaid capacities and pay-as-you-go items. We don’t expect them to be all-inclusive,” he said.
Microsoft has been changing its licensing practices to increase its revenue significantly, Golev said. “In the recent years, they moved from server- or device-based licensing to CPU-based and then core-based.”
In its reporting of M365 revenue, Microsoft focuses on average revenue per user (ARPU), “which is now hitting its ceiling,” he said. “You can only scale so far. Earth’s population grows slower than Microsoft’s revenue targets. What we have been predicting is the move to ARPA — Average Revenue per Agent, which can scale exponentially,” Golev said.
