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TECHnalysis Research Blog

March 16, 2023
Microsoft 365 Copilot Enables the Digital Assistants We’ve Always Wanted

By Bob O'Donnell

In my nearly 25 years as an analyst, I have to admit that I’ve never seen advances move faster and competition get more intense than we’ve seen in the world of generative AI tools over the last few weeks. No sooner had Google finished introducing an impressive raft of new generative AI capabilities for its Workspace productivity suite, related additions to its Google Cloud Platform (GCP), and generative AI-focused development tools for both professional and “citizen” developers (see “Google Unveils Generative AI Tools for Workspace and GCP” for more) earlier this week, then large language model (LLM) developer OpenAI unveiled the latest version of its tool, ChatGPT4.

Now, less than 48 hours later, Microsoft is debuting Microsoft 365 Copilot generative AI capabilities for its suite of Office tools, as well as related updates for its Power Platform low code/no code development platform. Oh, and in between, Microsoft also confirmed that it had been using an early version of ChatGPT4 in its recently updated Bing Search. (It’s using ChatGPT4 to power M365 Copilot as well.)

Frankly, it’s getting very hard to keep up with it all. Just as surprising as the speed of all these announcements is their incredible scope. All of them are a big deal, and it will honestly take a while to fully understand, appreciate, and digest their impact.

In some ways, the latest Microsoft news was widely telegraphed by the company in its initial generative AI chatbot-powered Bing Search announcement from just a few weeks back. Indeed, there were some who even wondered why Microsoft didn’t bring these capabilities to Office first. Regardless, now that they’ve been officially unveiled, it’s worth diving into what they offer and what their potential impact could be.

At a basic level, the integration of Copilot capabilities into Word, Excel, PowerPoint, Outlook, and Teams delivers a number of the features we’ve quickly come to expect from these types of tools. You can use Copilot to generate new text-based content, analyze numeric data, create new designs, summarize email, chat discussions, or other content, and much more. The word “Copilot,” which the company very intentionally chose, is meant to clarify the type of role that AI content is meant to play and, at the same time, emphasize the continued importance that humans still play in creating and controlling it. In some cases the new capabilities build on some simpler (but still useful) AI-powered features in previous versions of Office, such as the incredibly useful Designer feature in Power Point, which can turn basic slides into an elegant presentation. With Copilot, the ability extends to building the entire presentation in the first place from something as simple as a few ideas in a different Word document. In addition, there are completely new features, such as Excel data analysis, visualization, and natural language formulas.

As practical as these new capabilities can be, what really makes them so potentially impactful is that Copilot can use your own existing documents and other data through what Microsoft has long been calling the Microsoft Graph, making the outcomes immensely more personal. Technically, Microsoft Graph is an API that developers can use to build customizable applications. The company’s been talking about the Graph for several years now, but I’m guessing that up until now, most people didn’t know much about it. The Graph lets applications “see” things like your emails, calendar, documents, usage patterns and other information that’s stored in Microsoft’s cloud-based service such as, OneDrive, Office 365, Teams and more. For the purposes of a generative AI-based tool, that information becomes incredibly valuable, because it provides incredibly important context to its content generation capabilities. In other words, Copilot doesn’t just create content or make suggestions from scratch, it does so knowing the contents of the documents you’ve been creating, the emails you’ve sent and received, your meeting schedule and summaries, and much more.

The net result is the ability to function as an incredibly intelligent personal digital assistant, as well as a useful generative content tool. For example, Copilot can find trends in Excel data, generate emails based on past messages, create PowerPoint designs from other documents you’ve worked on, etc. Honestly, it’s what we (or at least I) always dreamed Cortana, Siri, Alexa, and other digital assistants might eventually become if they were truly intelligent—but that we sadly knew they never could. In its best form—and most importantly, if it truly works as advertised—365 Copilot offers a profoundly new way of working and thinking about productivity in general. It really could be that big of a deal.

As with Google’s related recent announcements, there’s still a lot more vision in Microsoft’s latest news than reality. There are also a whole lot of things that will take time to unpack and fully understand. Some of the demonstrations of what 365 Copilot can do, however, are pretty mind-blowing. Unfortunately, also like Google’s new generative AI offerings, pricing and business models have yet to be determined and initial availability will be limited to a very small set of trusted testers (20 companies in Microsoft’s case). In addition, though the underlying ChatGPT4 model’s capabilities have been further refined, it’s still possible for Copilot to create false information (“hallucinate”) and potentially incorporate biases or other issues in its responses, as all current generative AI tools do. This is an industry-wide problem that everyone continues to work on, but it’s an important caveat to bear in mind when using any of these kinds of tools from Microsoft, Google, OpenAI, or any vendor.

The promise of these generative AI tools continues to amaze, however, and that’s undoubtedly what has everyone so excited about their potential. The incredibly competitive environment for generative AI is also great for all of us, because it’s bound to push these companies (and others yet to come) into building better and better tools. Let’s not forget, for example, that we’ve heard virtually nothing from Amazon, Apple, and several other large tech companies about their generative AI plans, and we’re bound to see a bunch more exciting startups enter the fray this year as well.

In addition to new companies, the Microsoft announcements highlight how we’re starting to see new types of applications for generative AI as well. The company’s new Business Chat tool, for example, which will be available via Teams, includes the ability to apply the personal digital assistant-like capabilities that you can use as an individual to group communications (including the ability to incorporate files from multiple people in a chat, help organize and summarize meetings, and more). Additionally, the latest AI extensions for Power Platform expand earlier announcements to include the ability to simply describe how you want an app or macro to work and have the tool create the code for you. As I described a few weeks back (see “The Surprise Winner for Generative AI”), this really takes the notion of a citizen developer to a whole new level and, in the long term, could end up being one of the most impactful outcomes of these developments in LLM-powered generative AI tools.

To be clear, the ultimate success (or hype-induced failure) of any of these tools will eventually come down to how effective and useful they prove to be in widespread, real-world use, and that has yet to be seen. There are still enormous questions to be answered about reliability, stability, usability, and much more when it comes to LLMs and the generative AI tools and services they enable. Indeed, only with the benefit of time will we truly be able to evaluate how impactful (or harmful) these developments prove to be. Still, it’s hard not to get excited about the kinds of possibilities they might enable, and for now, that’s going to drive a lot of advances in a field that is bringing a once-in-a-generation sense of vigor to a previously moribund tech market.

Here's a link to the original column:

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on LinkedIn at Bob O’Donnell or on Twitter @bobodtech.