As a Microsoft Solutions Partner, Ascend Technologies is focused on helping you turn AI momentum into secure, measurable outcomes. Microsoft’s latest announcements bring powerful new capabilities to Microsoft 365 Copilot and introduce new licensing options designed to help organizations scale AI with governance built in.
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Copilot Wave 3, Agent 365, & Microsoft 365 E7
Security Copilot Included in Microsoft 365 E5
Copilot Wave 3, Agent 365, & Microsoft 365 E7
Microsoft has introduced the next phase of AI within Microsoft 365, including:
- Copilot Wave 3 – expanded AI capabilities embedded directly in Word, Excel, PowerPoint, and Outlook
- Microsoft Agent 365 – a new platform for managing and governing AI agents across your organization
- Microsoft 365 E7 (Frontier Suite) – a new bundled offering that combines Microsoft 365 E5, Copilot, and Agent 365 into a single license
These updates are focused on helping organizations scale AI usage while maintaining visibility, control, and security.
Why This Matters
As organizations move beyond experimenting with AI, the biggest challenge becomes governance and control.
Without clear policies and visibility:
- AI tools can access sensitive data unintentionally
- Different teams may build overlapping or unmanaged solutions
- Security and compliance risks increase
Microsoft’s approach here is to pair AI capabilities (“intelligence”) with centralized oversight (“trust”), giving IT teams the ability to manage AI usage at scale.
Key Capabilities:
- AI inside daily workflows: Copilot continues to evolve into a built-in assistant across Microsoft 365 apps—helping users draft, analyze, summarize, and collaborate directly in their work
- Expanded AI model options: Microsoft is introducing more flexibility in underlying AI models (including OpenAI and Anthropic Claude), allowing better performance depending on the task
- Agent management and governance (Agent 365): A centralized way for IT to monitor, manage, and secure AI agents across the organization
- Simplified licensing (Microsoft 365 E7): A bundled option designed for organizations looking to deploy AI broadly without managing multiple licenses
Impact on Ascend Clients
Many organizations are already exploring Copilot or building internal AI workflows—but most don’t yet have a clear strategy for governance, ownership, and long-term management.
This update signals a shift from trying AI tools to operationalizing AI across the business.
Ascend helps clients bridge that gap by ensuring:
- AI is deployed securely
- Data access is properly controlled
- Teams are trained and aligned
- Licensing decisions match actual usage
Recommended Next Steps
- Inventory any existing AI tools or agents being used across your organization
- Define ownership and accountability for AI-driven workflows
- Review what data AI tools can access and where restrictions are needed
- Align security policies (Conditional Access, DLP, logging) with AI usage
- Evaluate whether bundled licensing (like E7) aligns with your strategy
- Contact your Ascend Microsoft team to assess readiness and governance planning
Contact our team for a licensing assessment and we can help you do all of that!
Security Copilot Included in Microsoft 365 E5
Microsoft is embedding Security Copilot—an AI-powered assistant for security operations—directly into core Microsoft security platforms, including:
- Microsoft Defender
- Microsoft Entra (identity and access management)
- Microsoft Intune (device management)
- Microsoft Purview (data security and compliance)
For organizations with Microsoft 365 E5, Security Copilot is being rolled out through a phased, automatic activation process.
Why This Matters
Security teams are dealing with increasing alert volume, complexity, and response time pressure. Security Copilot is designed to help by:
- Summarizing incidents and alerts
- Assisting with investigations
- Providing recommended actions
- Reducing time spent on repetitive analysis
Because it’s embedded directly into existing tools, teams can use it within their current workflows without switching platforms.
Key Capabilities:
- Automatic activation (zero-click provisioning): Eligible tenants are enabled automatically after notification—no manual setup required
- Phased rollout with advance notice: Microsoft provides a 30-day notification before activation
- Included usage capacity: Organizations receive a monthly allocation of Security Compute Units (SCUs), which measure how much AI processing is used
- No immediate infrastructure setup required: Microsoft handles backend provisioning, including data location and processing settings
Impact on Ascend Clients
While activation is automatic, effective use is not.
Without planning:
- Too many users may gain access too quickly
- Use cases may be unclear or inconsistent
- Capacity (SCUs) may be underused or mismanaged
Ascend helps clients take a structured approach by:
- Defining high-value use cases first
- Aligning access with security roles
- Establishing governance around usage and monitoring
Recommended Next Steps
- Watch for activation notifications in the Microsoft 365 admin center
- Identify 1–2 high-impact use cases (e.g., phishing triage, access reviews)
- Review and adjust role-based access to Security Copilot
- Establish ownership for monitoring usage and SCU consumption
- Define what “successful use” looks like for your team
- Contact your Ascend Microsoft team for guidance on rollout and governance
Sources:
https://learn.microsoft.com/en-us/copilot/security/security-copilot-inclusion
Ascend Can Help
Whether you’re navigating licensing changes, planning for upcoming pricing updates, evaluating Copilot adoption, or preparing for operating system upgrades, Ascend is here to support you with practical guidance and hands-on help. We’ll meet you where you are, answer your questions honestly, and help you take the next right step—no pressure, no unnecessary complexity.
If you’d like to review how any of these updates apply to your environment, or want help planning ahead, reach out to your Ascend Microsoft team. We’re always happy to help.
Check out our January 2026 update and subscribe to our monthly newsletter to stay up to date.
FAQ
What is Microsoft 365 Copilot Wave 3?
Microsoft 365 Copilot Wave 3 is the latest set of updates to Copilot that enhances how AI works inside apps like Word, Excel, PowerPoint, and Outlook. It focuses on deeper integration into daily workflows, helping users create content, analyze data, and collaborate more efficiently using their organization’s existing data and context.
What is Microsoft Agent 365?
Microsoft Agent 365 is a new platform designed to help organizations manage and govern AI agents. It provides a centralized way for IT and security teams to monitor usage, apply policies, and maintain control as AI tools are adopted across the business.
What is Microsoft 365 E7 (Frontier Suite)?
Microsoft 365 E7, also referred to as the Frontier Suite, is a new bundled offering that combines Microsoft 365 E5, Copilot, and Agent 365 into a single license. It is designed for organizations looking to deploy AI at scale while maintaining strong security, compliance, and management controls.
Is Microsoft 365 E7 required to use Copilot or AI features?
No. Microsoft 365 E7 is not required. Organizations can still use Microsoft 365 Copilot and related features through existing licensing options. E7 is simply a bundled option for organizations that want a more integrated approach to AI, security, and governance.
What is Security Copilot in Microsoft 365 E5?
Security Copilot is an AI-powered assistant built into Microsoft security tools like Defender, Entra, Intune, and Purview. It helps security teams investigate threats, summarize alerts, and respond faster by providing insights directly within the tools they already use.
Do we need to manually enable Security Copilot?
In most cases, no. For eligible Microsoft 365 E5 customers, Security Copilot is rolled out automatically after a 30-day notification period. However, organizations should still review access, roles, and usage policies before broadly enabling it across teams.
What are Security Compute Units (SCUs)?
Security Compute Units (SCUs) are Microsoft’s way of measuring how much AI processing your organization uses within Security Copilot. Each tenant receives a monthly allocation based on the number of licensed users, and usage resets each month.
How should organizations prepare for Copilot and AI adoption?
Successful AI adoption requires more than just turning features on. Organizations should review data access, define governance policies, assign ownership, and identify high-value use cases. Starting with a small pilot group and expanding gradually is often the most effective approach.
What are the risks of using AI tools without governance?
Without proper oversight, AI tools may access sensitive data, produce inconsistent results, or be used in ways that create compliance or security risks. Establishing clear policies, access controls, and monitoring helps ensure AI is used safely and effectively.