GENERATIVE AI: PAY-AS-YOU-GO BILLING FOR SHAREPOINT AGENTS
Author: Jonathan Stuckey
Audience: Project manager, Solution designer, Information manager and Business user
In this article I have taken a look at the implications of Microsoft's PAYG model being introduced this month. The introduction of transaction billing for SharePoint Agents, is enabled as part of the ongoing introduction for Syntex services being 'transitioned' to broader adoption models.
Previously we've commented that you can't get the best out of Copilot, without Microsoft 365 apps, SharePoint and Microsoft Purview - but can you? ...and avoid the massive cost hike?
Is PAYG a better way to adopt SharePoint Agents?
We commented (a lot) last year, how the cost/benefit model for Microsoft 365 Copilot was really difficult to make work. So, does the Pay-as-you-go (PAYG) billing model work any better? When we compare PAYG versus purchasing Microsoft 365 Copilot licenses, it should always involve evaluating the costs and benefits in the context of your organization's needs, but as a start for ten I've put the "back of fag-packet" cost analysis below.
You see what you think, before starting to factor in the actual cost of adoption....
Considerations
SharePoint Agents via PAYG Billing allows for:
Flexibility: The PAYG model allows organisations to enable SharePoint Agents for specific use cases without committing to full Microsoft 365 Copilot licenses. This is ideal for targeted deployments or pilot programs.
Cost Structure: Usage is billed at $0.01 USD per message (approximately $0.016 NZD). Each interaction (a question and its answer) consumes 32 messages, costing $0.32 USD (~$0.51 NZD).
Scalability: Expenses scale with usage, making it suitable for organisations with varying needs.
Setup Requirements: Requires an Azure subscription and resource group to activate billing.
Whereas Microsoft 365 Copilot Licenses:
Fixed Cost: Licenses are purchased per user at $20 USD/month (~$31.60 NZD/month), regardless of usage.
Comprehensive Access: Licensed users gain access to all Copilot capabilities across Microsoft 365 apps, not just SharePoint Agents.
Predictability: Costs are fixed, providing budget certainty.
Cost Impact Analysis
For keeping the example locally relevant, I've converted the costs to New Zealand Dollars (NZD)
Scenario Assumptions
The following assumptions are used to provide a common frame of reference for calculations:
Organisation: 1,000 users with standard E5 licensing.
Deployment: SharePoint Agents for 5 – 10 scenarios (e.g., HR Advisory, Financial Q&A etc).
Usage: 10% of users (100 users) raise 3–8 queries per week.
PAYG Cost: $0.51 NZD per interaction (question + answer).
Example Use Cases for Agents
For practical purposes we have assumed the pilot / adopting organisation is following the setup of typical early-adopter agent use-cases. These are non-industry or front-office specific:
HR Advisory Support: Employees can query policies or procedures directly from HR-related SharePoint sites.
Financial Controller Q&A: Finance teams can quickly retrieve financial reports or guidelines from designated libraries.
Technical Documentation Assistance: Engineers can access troubleshooting guides or product manuals stored in SharePoint.
etc
PAYG Billing Model Costs
For 100 users raising an average of 5 queries per week:
Total Interactions Week = 100 × 5 = 500
Weekly Cost = 500 × $0.51 = $255 NZD
Monthly Cost = $255 × 4.33 ≈ $1,094.62 NZD
For higher usage (8 queries/week):
Total Interactions Week = 100 × 8 = 800
Weekly Cost = 800 × $0.51 = $408 NZD
Monthly Cost = $408 × 4.33 ≈ $1,751.40 NZD
Microsoft 365 Copilot Licensing Costs
If all 1,000 users are licensed:
Monthly Cost = 1,000 × $31.60 = $31,600 NZD
If only the active user group (10%) is licensed:
Monthly Cost = 100 × $31.60 = $3,160 NZD
Comparison of Costs
Let's put that in a quick comparison table:
Option | Monthly Cost (Low Usage) | Monthly Cost (High Usage) | Notes |
PayG Billing | ~$1,094.62 NZD | ~$1,751.40 NZD | Scales with usage; more cost-effective for limited deployment and specific scenarios |
Microsoft 365 Copilot Licenses* | $3,160 NZD | $3,160 NZD | Fixed cost; provides broader access across Microsoft apps |
Full Copilot Licensing for All** | $31,600 NZD | $31,600 NZD | High cost; suitable only if all users require full access |
*Assumes licensing only for active user group (~10%).
**Assumes licensing for all users in the organization.
The tipping-point
If we scale up the PAYG model, at 194 transactions per month the cost for running the agents passes the equivalent cost of licensing for 100 users (at $3,160 per month), and suddenly this isn't such a good idea.
Summary
Let's bring this back to why we started this: Microsoft 365 Copilot licensing per-user is not a good value proposition on its own. It's very pricy for loosely defined benefits and cumulative costs, and to get the value delivered without incidental Privacy or Security issues is relatively high investment for most organisations.
NOTE: Microsoft has signalled they know this with frantic loading of other products and services into the license i.e. adding SharePoint Pro Admin services, Viva Insights dashboard and tracking services etc.
SharePoint Pay-as-you-Go services are good alternative way to assess, design, test and deploy with a predictable licensing cost model - because its transactional. ...You will also need to factor in the operational license costs associated with Entra (née Azure) subscription and associated services.
WORD OF CAUTION: Its cost-effective when tightly managed and monitored in deployment and use. If you don't manage it, there will be some nasty surprises in recurring billing.
Recommendations
For Limited Use Cases: Adopt the PAYG model if your organisation is testing SharePoint Agents or deploying them for specific scenarios (e.g., HR or finance). This approach minimises upfront costs and aligns expenses with actual usage.
WARNING: For organisations expecting lower interaction volumes or piloting AI capabilities in specific scenarios, PAYG remains more cost-effective but be very careful with resource consumption and metering during your pilot.
For Broader AI Needs: If users require access to AI features across multiple Microsoft apps beyond SharePoint; your projected usage heads north of 194 transactions per month or greater than 10% of org is onboarded - consider purchasing Microsoft 365 Copilot licenses for the active user group.
Hybrid Approach: Combine both models by using PAYG for occasional or scenario-specific use while licensing key power users who need comprehensive access.
Article development
Generative AI tools were used to rapidly create structure and refine the wording for publication of this article. The content concept, analysis and assessment framework were created using Spoke standard operational models coupled with consultant knowledge and based on release of previous articles and business assessments.
Topic generation, ideation for content and practical evaluation of the content presented was entirely the author's output. Generative AI minimised the effort required for wording refinement and image generation:
Article text: 2-hour of work on prompt-design, resources for grounding and article editorial work.
Image generation: 2 hours with Microsoft Designer and image editing
Summary quality and accuracy review: 1 experienced person, 1/2 hour.
Result: Validated, real-world content based on personal knowledge and experiences.
Any errors in content and presentation of the article are the author's responsibility.
Want to know what we know? Give us a call!
Looking for guidance in adopting Generative AI in a robust and useful manner? Or interested in learning how to adopt Generative AI into day-to-day office productivity, or even just learn some of the tricks-of-the-trade? Email us at hi@timewespoke.com
About the author: Jonathan Stuckey
Comments