A Static State: New M365 E7 Notes

Saturday, March 21, 2026

New M365 E7 Notes

By now, many of you have heard about the major announcements about the new M365 E7 offering. There are a couple of my notes around all the new capabilities.

Work IQ

A key announcement is Work IQ, an intelligence layer that helps M365 Copilot understand your working habits, collaborators, and shared content. Work IQ personalizes Copilot to fit your needs.
Work IQ consists of three interconnected layers: data, context, and skills/tools.
Its purpose is to enhance Copilot by working with any foundational model chosen by users, such as Open AI or Anthropic.
Work IQ's foundation lies in secure access to both your structured and unstructured data through the M365 graph, along with any business data reached via Copilot Connectors outside of M365.
The Context component grounds Copilot in M365 data, providing baseline understanding of your activities. It considers factors like your skills, ongoing projects, collaboration frequency, your network, critical tasks, and more. The Memory feature allows you to mark specific data for recall, while implicit memory uses your history to generate answers. Work IQ also assesses your activity throughout M365 to build context and maintains a business perspective on your role.
Work IQ offers agentic skills, which are specialized instructions for tasks—such as scheduling meetings or finding notes—alongside tools that Copilot uses to carry out these tasks.
Integrated across all Copilot applications and experiences, Work IQ enables Copilot to deliver contextual information tailored to your prompts. You can ask about your manager, projects, processes, and more, and receive responses relevant to your situation.

Copilot Cowork

Anthropic (Claude Cowork) has now been integrated into M365 Copilot. Copilot Cowork enables advanced, long-running, multi-step workflows that extend beyond simple prompts and responses. Coupled with Work IQ, users can now delegate substantial tasks to Copilot, allowing for oversight of ongoing work.
Cowork is capable of decomposing complex requests into actionable steps, reasoning across multiple tools and files, and completing assignments on behalf of the user.
Cowork’s operations are transparent and observable; users can monitor progress, provide guidance, halt, or modify tasks as necessary throughout the workflow.

Agents in Chat

Chat in Copilot serves as a starting point, enabling users to seamlessly create documents, spreadsheets, presentations, and more based on their interactions. There's no need for users to copy and paste or switch between different tools, ensuring a streamlined workflow and helping them accomplish tasks efficiently.
Copilot simplifies building agents for everyday tasks using Agent Builder, while Microsoft Copilot Studio supports the development of more advanced business processes.

Multi-model Intelligence

As noted previously, the launch of Wave 3 demonstrates ongoing commitment to Microsoft's vision of providing users with flexibility rather than limiting them to a single model. Claude is currently unavailable as a primary chat option for users, while OpenAI models remain accessible.

Agent 365

A key feature introduced with M365 E7 is the Agent 365 solution.
Customers should expect that agents will become widespread on all platforms, not just within Microsoft environments.
Agent 365 serves as a centralized control plane for managing enterprise-level agents, allowing organizations to monitor, secure, and govern every agent throughout their operation.
In essence, managing agents resembles managing users, utilizing familiar tools and strategies already in use by organizations today.

Why Microsoft Included Entra Suite in Microsoft 365 E7

To enable AI agents to operate under Zero Trust: As AI moves from assistance to action, Microsoft needed a way to apply identity, access controls, and policy enforcement not just to users, but also to AI agents operating across the environment.
To extend identity governance beyond humans to non‑human actors: Entra Suite allows organizations to apply lifecycle management, least‑privilege access, and conditional access to AI agents the same way they do for employees, apps, and services.
To make large‑scale AI adoption auditable and defensible: Agent actions can be logged, monitored, and governed through Entra, Defender, and Purview—supporting compliance, investigations, and regulated industry requirements.
To prevent “shadow AI” as agents proliferate across the business: Entra Suite provides centralized identity and access governance so agents created by different teams don’t operate outside security and policy boundaries.
To complement Agent 365 with identity‑level enforcement: Agent 365 provides visibility and control over agents, while Entra Suite provides the identity foundation that determines who or what an agent is and what it is allowed to access.
To move customers from AI experimentation to enterprise execution: Microsoft included Entra Suite to remove the need for additional identity add‑ons and give customers a single, trusted platform to deploy AI safely at scale.
To align E7 with the “agentic enterprise” strategy: E7 is designed for a future where humans and AI agents work side‑by‑side; Entra Suite is what makes that model secure, governable, and enterprise‑ready.

What comes in E7?

Think of the new E7 suite as the M365 AI suite.
First, it brings in M365 Copilot Add-on which previously was an add-on SKU to either E3 or E5.
Second, it brings in Agent 365 to assist organizations with their enterprise management of agents.
Third, the Entra Suite add-on is part of the E7 suite. Entra ID Suite was included in E7 primarily to make large‑scale, governed AI agents viable and defensible in enterprise.