With the artificial intelligence (AI) market moving quickly and AI tools becoming widely used in an array of ways, companies like Microsoft are starting to charge a premium to use them.
It was recently announced it will cost an additional USD $30.00 a month to add Microsoft generative artificial intelligence capabilities to a corporation’s existing suite of products. The increase will be a substantial 53-83% rise above the average monthly price of business-grade versions of the Microsoft 365 (formerly Office 365) service.
Not surprisingly, Microsoft shares soared to new heights after the announcement was made.
The swiftness of the escalation in the price for Microsoft’s newest AI product represents a huge new market with roughly 382 million workers using the central 365 products, according to the tech giant. Now Microsoft is doing its best to lead the charge with pricing and the launch of the new AI products, a strategic move to directly compete with OpenAI and Google
According to Statista, over a million companies worldwide use Microsoft 365 and although not all of these companies will opt in for the new AI software addition, we imagine a fair amount will boosting Microsoft’s revenue for 2023 significantly.
Suggesting that this is the course the cost of AI will take, Satya Nadella, Microsoft chief executive, said the pricing decision is in line with bringing companies the AI innovative element they need.
In an interview with Financial Times, he said, “I would think of this as the third leg”.
Further, he asserted generative AI is in “the same class of value” as the other flagship products because now company employees can automate everyday tasks, thereby augmenting output.
During the company’s annual partner conference, Microsoft also launched a variety of AI products inclusive of a chatbot to assess if workers are covertly sharing sensitive corporate data into ChatGPT’s.
In comparison to USD $20.00 for the premium version of ChatGPT and USD $19.00 GitHub Copilot, Jason Wong, an analyst at Gartner, said that the new AI Microsoft tool is “at the higher end of what we see for other generative AI services”.
With increasing inflation, mass layoffs occurring and consumers spending less as Channel News recently reported, Wong said that new features like Microsoft’s Copilot will be “a challenge for enterprise buyers”.
“They need to find [the] budget for this add-on product. And then they need to justify the extra charge.”
A “slow” rollout will potentially occur with workers who primarily work in communications, he said.
With the advent of AI in the workforce, critics suggest it will lead to a “content explosion” that will have employees overwhelmed with AI-generated communication with too many emails in their inboxes.
Nadella countered that he believes it would instead decrease work emails because employees will locate solutions from AI software as opposed to coming to colleagues with unnecessary questions.
Soon corporations will learn for themselves if this is the case with the new Microsoft plans costing the USD $30.00 above the E3 version for USD $36.00 and the E5 version for USD $57.00.
