Microsoft is rarely first with the best product. Word wasn't the first word processor. Teams arrived years after Slack. For the last two years, Copilot has been judged against ChatGPT and Claude as a chatbot, and on that test it has mostly lost.
I've worked with Microsoft products for over 30 years, and I've learned not to write them off. When Microsoft wins, it's rarely because the product was better at launch. It wins because it was already inside the business, already paid for and already managed by IT. Teams didn't beat Slack on features. It beat Slack by already being there.
It doesn't always work. Windows Phone arrived late to a market where Microsoft had no foothold, and no amount of catching up saved it. The pattern holds when Microsoft starts from inside the building. With Copilot, it does.
The advantage nobody explained
Copilot's real strength isn't the chat. The paid version works with your own email, files, meetings and chats, inside the permissions and controls your business already has.
That gives it two things other tools struggle to match. The first is a safe tool staff can use today. In most businesses I visit, someone is pasting client details or pricing into a personal ChatGPT account. Signed in with a work account, Copilot keeps that information under your own Microsoft 365 terms, and it isn't used to train the models. It's much easier to steer staff towards a safe tool than to ban the unsafe ones.
The second is context. Claude and ChatGPT can connect to Microsoft 365 too, and their business plans are well run. But connecting them means giving another company access to your mail and files, adding it to your data protection paperwork, and accepting that your data leaves Microsoft's boundary. That's manageable, but most small businesses have never done it. Copilot lets them skip that step.
Microsoft has explained this well to IT managers. It hasn't explained it to the MDs who make the decision.
Why the moat leaks
If Copilot were nearly as good as the alternatives, most staff wouldn't look elsewhere. For a long time it wasn't, and that gap has been the biggest leak.
Microsoft is now moving to close it. Copilot Cowork launched in June running on Anthropic's Claude models, and Claude is now an option inside Copilot itself. Part of Microsoft's answer to the quality gap has been to bring in the competition. But Claude inside Copilot isn't the same as using Claude directly. The model sits inside Microsoft's own retrieval and orchestration layer, and it only sees what that layer finds in your files. UK businesses also have to switch it on before anyone can use it. Same model doesn't mean the same result.
Other leaks remain. The names confuse people. Many try the free Copilot Chat, which mostly works from the web, and write the whole product off. The price looks high before anyone sees what it can do. And many rollouts come with no training, so staff never learn what to ask it.
Cowork adds a new one. It comes with no allowance at all. Your Copilot licence gives you access, but every task is billed on top, and someone has to set up billing before anyone can try it. Claude includes its equivalent in the subscription up to a usage limit. For a cautious MD, a known monthly cost beats an open meter every time.
The last leak is the one you control. Copilot can only work with what's in your Microsoft 365 setup. If that's full of folders shared with everyone, three versions of the price list and files nobody has touched since 2019, Copilot's answers will be out of date or wrong. Staff will decide it's rubbish and go back to ChatGPT. The moat leaks from the inside too.
It keeps moving
Since June, Cowork has launched on metered billing, Claude has arrived inside Copilot with a separate switch for UK businesses, the work and personal Copilot apps have been merged into one, and the product has lost the "365" from its name. That's one summer.
None of these changes is hard to follow on its own. Together they mean advice from six months ago may now be wrong, and screenshots in last year's training guide no longer match what staff see. Most MDs don't have time to track this, and plenty of IT providers are struggling too.
That's a leak as well. When nobody in the business knows what's changed, people stop trusting the tool and fall back on whatever they used before.
Copilot has a massive advantage in the area that matters most: your context, inside your own controls. It's still catching up on the rest. Some of those leaks are Microsoft's to fix. The one inside your own files is yours, and that's where I'll pick up next time.
Written with Claude, then steered, cut and checked by me. I answer for it.
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