What Microsoft’s September 2026 Copilot Update Means for IT Leaders

The most common use case I’ve seen is for tasks where people “create things”, often spreadsheets, and it gets emailed around or shared. With the launch of a solution like code, that same creator on that team can describe an app they want in plain language and have Copilot build it, and IT can run it inside the tenant where it’s governed. Giving those power users the ability to create applications without having to know code.

That’s just one major piece of the update. Most of the rest pulls things that used to live in separate places into one app, adds a few new capabilities, and fixes pain points people have been raising for a while. Bringing this all together before the Ignite conference in November.

What’s New In The Copilot App

The Copilot app now has three areas. ‘Home‘ is where you ask for things, ‘Code‘ is where you build things, and ‘Autopilot‘ is where an always-on agent works on your behalf.

Home & Office In Copilot

Home is the new landing page in the Copilot app. It puts Chat, for quick questions and drafts, on the same screen as Cowork, which takes a delegated task and hands back a finished result. Microsoft says Copilot will eventually route each request on its own, so people won’t have to pick a mode. I’m not sure I love that part, especially since they are billed differently but I suspect that is a sign of things to come.

Office in Copilot adds full Word, Excel, and PowerPoint creation and editing inside the app. Chat can also take on long, multi-step work now: drafting email, managing meetings, working in Teams, managing OneDrive and SharePoint files, and creating Office, PDF, and HTML files. Anything sensitive waits for the user’s approval. The benefit is that a request produces a real, editable file your team works on together. A proposal team asks for a first-pass RFP response and gets a Word document they edit as a group, instead of pasting chat output into a template.

Copilot Code

Code is a new tab where anyone can describe an outcome and Copilot builds it. Designed to compete with Claude Code and Codex-like tools to lower the bar for building things. It’s built on the same technology as GitHub Copilot, runs in a sandbox, and draws on your work context. However, it’s aimed at business users, and professional developers stay on GitHub Copilot. It’s the shift I wrote about earlier this year, built into the product. The benefits are endless and in my experience, it takes a lot of work out of spreadsheets, dashboards, and other line of business tools that require you to work the way they are designed. You get to create tooling that is designed specifically for the outcome you want.

Autopilot (Formerly Scout)

Autopilot, which Microsoft previously called Scout, is an always-on personal agent with persistent context and memory. Each Autopilot has its own identity in your directory and works under permissions your admins control.

The benefit is work that keeps moving while the person is busy with something else. An account manager’s Autopilot watches for renewal dates, customer emails, and meeting follow-ups, and has the brief ready before the call.

The Platform Behind The New Copilot Experiences

Copilot Managed Runtime is now in public preview

Copilot Managed Runtime is Microsoft-operated hosting that runs apps inside your Microsoft 365 tenant boundary. It hosts what people build in Code, Cowork, and Copilot Studio, plus third-party and pro-developer tools through an SDK and CLI. Entra handles sign-in and sharing. Your organizational policies decide which connectors, data, and endpoints an app can reach, Git handles version and source control, and IT manages the apps from a new Apps page in the Microsoft 365 admin center.

The benefit is that citizen-built apps land somewhere IT can see and manage. The app you just built with Code runs with Entra sign-in and IT visibility, so it doesn’t turn into the next shadow-IT Access database and security can be included from the start.

Fabric IQ & Work IQ

Fabric IQ grounds Chat and Cowork in your organizational data, and Microsoft says that includes more than 20 million Power BI semantic models. Work IQ adds Dynamics 365 Sales, Dynamics 365 Customer Service, and Power Platform data and workflows. A plugin registry gives you one central directory to deploy and manage Microsoft, partner, and internal plugins.

The benefit is answers that come from your structured data. A finance manager asks a question and gets an answer grounded in the Power BI model the team already uses. A sales leader asks which deals are at risk this quarter and gets CRM opportunity data combined with the email and meeting context around those deals.

Pricing & FinOps

There are now two ways to pay. The per-user Copilot license covers everyday AI. Agentic work, meaning tasks Copilot carries out for you instead of just answering, runs on usage-based Copilot Credits.

Code and Autopilot also require a Microsoft 365 Copilot license, and nothing billed on credits works in your tenant until an admin creates a spending policy. Frontier models such as Astra and Fable run on credits too. Auto, which comes with the license, picks the model for each request by balancing accuracy, speed, and cost.

The FinOps tools, in preview, are what make this manageable and is a welcomed evolution. Admins can assign which models and effort levels each group gets, including what Auto can choose in Cowork. Cost management covers Cowork, Code, Managed Runtime, and advanced SharePoint and OneDrive work, with Copilot Studio agents added in October. A dashboard ties credit usage to outcomes, spending policies can be managed through an API, and credit requests can route into the approval workflows you already use.

The benefit is that you decide what you pay for before the invoice arrives. A CFO can give a small group of power users the most capable models for a high-stakes project, keep everyone else on cost-efficient defaults, and see what that investment produced in a dashboard. (I covered the same discipline for Cowork in June.)

When Each Piece Arrives

What IT Admins Need to Know

Microsoft is removing the admin setting that hid usage-based experiences from users. Starting in October for standard customers and November for deferred customers, the Cowork, Code, and Autopilot entry points are visible to licensed users by default. Users without a spending policy see “request access,” unless an admin changes it to “learn more.”

My Take

The most valuable new capabilities are metered, while the Copilot license covers everyday AI, so the budget conversation moves from how many licenses you need to what work is worth paying for. It becomes critical that you encourage AI usage but do so with a cost/benefit mindset and process. AI should be evaluated based on the results it delivers and not fall into the trap of looking like work but making no progress.

Code is going to be incredibly powerful. I am excited that it is being delivered with managed runtimes that have access and security built in. Citizen development without a governed place to run it is how every organization ended up with orphaned Access databases and Power Apps nobody knows about. With Managed Runtime, the apps people build live inside the tenant, signed in through Entra and visible to IT.

Treat every Autopilot like a user. It needs an owner, scoped permissions, and an audit trail. Each one already has its own identity in your directory, so the tools to manage it that way are already in place.

Taken together, the update puts more of Copilot in one place, gives admins better controls, and makes the metered work visible to the people paying for it.

Build the Governance Model for What Comes Next

As Copilot expands into agents, apps, and usage-based AI, organizations need clear guardrails for access, ownership, security, and cost. Build a governance framework that helps your teams move faster without losing control.