Adoption of Microsoft’s 365 E7 suite has been slower than expected, according to managed service provider Tusker. The Chicago-based MSP has seen multiple clients upgrade to E7 as their licenses come up for renewal, but some are resistant to embracing Microsoft’s AI bundle.
“It’s too new,” Kush Patel, chief innovation officer at Tusker, which rebranded from ACP CreativIT earlier this year, told Channel Dive. “It's roughly 15% cost savings per license, but we’re still learning about its real-word development patterns, its credibility. We don’t know the full weaknesses yet.”
Microsoft announced the Microsoft 365 E7 license — branded "The Frontier Suite" — earlier this year, aiming to drive adoption of its AI stack by consolidating security and productivity tools with Microsoft Copilot and Agent 365, its control plane for managing AI agents.
Priced at $99 per month annually, the tech giant hoped to attract customers looking for a comprehensive AI package. But many enterprises use more than one AI platform, opting to use Copilot only where it’s needed rather than paying for enterprise-wide licenses.
“I haven’t seen a whole organization adopt a singular AI yet,” Patel said. “Finance may use Copilot for spreadsheets and presentations, but the developers want Claude because it codes better and marketing wants to use Gemini because it creates better images. I haven’t seen an enterprise say this is our AI across the board.”
Microsoft also locks clients in a one-year term, so some companies prefer staying on E5 and paying for Copilot licenses month-to-month, Patel said. Tusker encourages clients to slowly add-on to E7 tools like Agent 365 or the Microsoft Entra Suite before deciding to upgrade to the full E7 bundle.
“That's how we're seeing it play out in the market right now with our clients,” Patel said. “They don't want to jump into E7 because of the commitment, so we say dip your toes in it, get the add-ons first, see if you're going to use everything in that SKU. You can always upgrade. You can't really downgrade.”
Platforms like AWS Bedrock and OpenAI also allow organizations to pay only for the AI they consume rather than purchasing licenses for an entire workforce. That consumption-based pricing model is preferable for organizations that want to scale AI gradually, according to Tusker.
With the rising cost of tokens, CIOs and CFOs are increasingly demanding return-on-investment for AI tools. For Microsoft partners, that means outlining time and money efficiency before recommending enterprises buy AI stacks like E7.
Over the next few months, approaching the annual Microsoft Ignite conference, Patel forecasts E7 adoption rising. “It’s no longer going to be the new product out there, it’s going to have return on investment use cases behind it, and I see adoption going up into Q3 and Q4,” he said. “Around Ignite, there’s going to be a lot of movement in AI that will help drive us forward for next year.”
