> 📥 The full guide is available as a PDF (Danish, 6 pages). Download it at the top of the page — all settings, prices and sources in one place.
I just got a client started with Copilot Cowork. Until then, Copilot was a chatbot to them.
The licenses were in place. Copilot was used heavily in Teams and Word. And still, every single task ended with cutting and pasting text back and forth between the chat and the files they actually work in.
Explaining what Cowork is took two minutes. The rest of the meeting went to what nobody had told them: the switches in the admin center that decide whether Cowork exists for employees at all. Here's the full walkthrough. What has to be turned on, in what order, what it costs, and the questions I ask before I recommend a client open it up.
1. Same app, an entirely different way of working
Cowork is the agentic part of Microsoft 365 Copilot. You describe the task: build a spreadsheet of the contracts, draft the customer email, make the presentation from the report. Cowork runs the task to completion and delivers a finished piece of work, grounded in your own files, mail and calendars.
Chat gives you text you have to place yourself. Cowork delivers the file. It lives in the browser at m365.cloud.microsoft, in Outlook and Teams, and in the Copilot app on desktop and mobile. Microsoft itself calls it an agentic system, not a single agent: it can browse the web, run scheduled tasks and use plugins.
2. The license is the access card, not the access
Two things must be in place before an employee sees Cowork: an active Microsoft 365 Copilot license, and an admin having turned on usage-based billing. Microsoft's own wording is hard to misread: no Cowork usage is included in the Copilot subscription. Zero credits. You bought the access card; the usage is billed separately.
> This is where rollouts stall without anyone noticing. Cowork is off by default, and it's turned on in the Microsoft 365 admin center. Users can't do it themselves. The license alone turns on nothing.
3. The order: budget before button
1. Pick a payment model. Copilot > Cost Management > Get started in the admin center (requires Global admin or Billing admin). Talk to IT. Four options: the organization's default subscription, an Azure subscription, prepaid capacity packs, or pure pay-as-you-go. The prepaid P3 plan gives a 5-20 percent discount on a one-year commitment, from 300,000 credits and up.
2. Set the cap before you open. A monthly cap for the organization, a cap per user, and email alerts from a threshold you choose. If a user hits their cap, they lose access for the rest of the month. That sounds harsh — it's cheaper than a surprise on next month's invoice.
3. Turn on Cowork. Agents > All Agents > select Cowork. The same place controls discovery (whether employees can see Cowork and request access) and the tenant setting Cowork Browsing — whether the agent may use the browser on the user's machine.
4. Make the model choice deliberately. That gets its own section, because this is where compliance needs to be involved.
4. The model choice is a data processor decision
Cowork ships with a model picker: Microsoft's GPT models and Anthropic's Claude models (Opus and Sonnet), plus preview models. The Claude part is the one that requires a decision.
Anthropic operates as a Microsoft subprocessor, covered by Microsoft's Product Terms and DPA (the earlier arrangement, where Anthropic was an independent processor, was retired on May 1, 2026). But the processing happens outside Microsoft's EU Data Boundary: Microsoft explicitly exempts the Anthropic models from EUDB and any in-country commitments. The setting that controls it is called "AI providers operating as Microsoft subprocessors" and sits under Copilot > Settings in the admin center.
In the EU, EFTA and the UK, the Anthropic models are off by default. The exception is tenants created after March 25, 2026, where the setting is on from the start. If your tenant is older — and it is at most established organizations — an admin has to actively turn it on, and the Message Center shows your status. At my client it was off. The Claude models only appeared in the picker once it was turned on.
One more detail that's easy to miss: the preview model Claude Fable 5 is off by default and requires allowing the model provider to retain data. Nobody should make that decision by accident.
> Principle. If you go GPT only, the processing stays with Microsoft — but you've also made a model choice for the whole organization. Either way, it's a decision for your DPO, not a default you inherit. I started with Microsoft GPT models at one client. No Claude there. It works fine.
5. A heavy task costs more than 15 dollars
A Copilot Credit costs 0.01 dollars on pay-as-you-go. Microsoft's own planning numbers for Cowork:
| Task type | Credits | Price |
|---|---|---|
| Light task | 70-200 credits | up to $2 |
| Medium task | 400-600 credits | ~$5 |
| Heavy task | over 1,500 credits | $15+ |
Table 1. The numbers match my own week of use. Expect consumption to follow how heavy the tasks people give it are. A week of playing used ~2,000 of 20,000 credits in a couple of days — 10 percent of the $200 it cost. At moderate use: about 10 dollars a day.
Let's do the math on a pilot. 20 users each running three medium tasks a week at roughly 500 credits: about 129,000 credits a month. 1,290 dollars. Manageable, but not cheap if you compare it to a Claude Team setup. Scale to 500 users at the same usage and you're above 32,000 dollars a month. Without a cap, you find out on the invoice.
> My honest take. It's expensive. Microsoft has a cost estimator at aka.ms/CustomerCoworkEstimator — use it before the training day, not after. Think carefully about where in the organization you actually need Copilot Cowork.
6. The three questions I ask before I recommend opening it
1. What may a task cost? If you can't answer, the cap isn't set yet. Budget per user and alerts first, opening afterwards.
2. Has your DPO taken a position on the subprocessor setting? Anthropic outside the EU Data Boundary is neither dangerous nor forbidden. It's a decision that has to be made by someone with the mandate to make it.
3. Can your access management handle an agent? Cowork works with the user's permissions. If an employee has access to too much in SharePoint, so does the agent — and it's faster at finding it.
The switches take an admin ten minutes. The decisions behind them are what the meeting should be spent on. Start with the estimator and a cap, and a Monday morning without copy-paste is closer than most people think.
Sources
This guide is based on Microsoft's official documentation. Status as of August 2026:
- learn.microsoft.com/microsoft-365/copilot/cowork/cowork-admin-governance
- learn.microsoft.com/microsoft-365/copilot/cowork/get-started
- learn.microsoft.com/microsoft-365/copilot/usage-based-billing-overview-copilot-credits
- learn.microsoft.com/microsoft-365/copilot/usage-based-billing-manage-copilot-credits
- learn.microsoft.com/microsoft-365/copilot/copilot-anthropic-apps
- learn.microsoft.com/microsoft-365/copilot/connect-to-ai-subprocessor
- learn.microsoft.com/azure/cost-management-billing/reservations/copilot-credit-p3
- Microsoft Copilot Credits Guide, June 2026 (PDF) · microsoft.com · Cost estimator: aka.ms/CustomerCoworkEstimator
> ⚠️ Disclaimer. This is general practical guidance, not legal or compliance advice, and I am not a lawyer or compliance specialist. Don't use it as a basis for decisions on your own. Always involve your own compliance or legal department and your DPO, and verify dates and status against primary sources. All prices are in USD excl. VAT and may have changed; always check the vendors' own pricing pages. Status as of August 2026.
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Stefano Vincenti · GenAI strategist and architect · External lecturer, IT University of Copenhagen & DIS Copenhagen · Cofounder & CTO BotTellMe · Partner, TryZone · aitrainer.dk