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-[Q1. Is Copilot Studio only for chat?](#q1-is-copilot-studio-only-for-chat)
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</details>
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> [!IMPORTANT]
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> This is a practical **selection guide** synthesized from Microsoft Learn. For official canonical guidance (which evolves), always verify the linked docs: **AI Strategy decision tree** and **Which Copilot is right for you**.\
> This is a practical `selection guide` synthesized from Microsoft Learn. For official canonical guidance (which evolves), always verify the linked docs: [AI Strategy decision tree](https://learn.microsoft.com/azure/cloud-adoption-framework/scenarios/ai/strategy) and [Which Copilot is right for you](https://learn.microsoft.com/copilot/microsoft-365/which-copilot-for-your-organization)
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## Where to start?
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1.**Clarify the goal**: productivity in M365 apps, a custom line-of-business agent, or a full-blown AI app/platform?
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2.**Match to service model**: **SaaS (Copilots)** for speed, **PaaS (Azure AI)** for control, **IaaS** for maximum customization.\
* If you need a **custom business agent** (low-code), **multi‑channel** (Teams/web), automation with **Power Platform**, and quick time‑to‑value → choose **Copilot Studio**.\
* If you need a **developer platform** for **RAG**, multi‑agent patterns, **model choice**, evaluations, and deep integration → choose **Azure AI Foundry (Azure AI Studio)**.\
| Employees want AI in **Word/Excel/PowerPoint/Outlook/Teams** with enterprise-grade protections |**Microsoft 365 Copilot**| Natively integrated experiences; work & web chat; governed by M365 controls | Requires org licensing; respects Microsoft Graph permissions. Source: <https://learn.microsoft.com/copilot/microsoft-365/which-copilot-for-your-organization>|
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| Build a **custom agent** quickly, connect business data, **automate** flows, publish to **Teams or web**|**Copilot Studio**| Low-code authoring, topics, knowledge sources, **agent flows**, Power Automate | Great for fusion teams; supports channels via Azure Bot Service. Sources: <https://learn.microsoft.com/microsoft-copilot-studio/fundamentals-what-is-copilot-studio>, <https://learn.microsoft.com/microsoft-365/agents-sdk/choose-agent-solution>|
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| Develop a **RAG** app or **multi-agent** solution with fine control over models, evals, safety, and infra |**Azure AI Foundry (Azure AI Studio)**| Unified SDK/APIs, integrates Azure OpenAI & Cognitive Services, deep ops control | Best for pro-code; aligns with PaaS patterns in CAF. Sources: <https://learn.microsoft.com/microsoft-365/agents-sdk/choose-agent-solution>, <https://learn.microsoft.com/azure/cloud-adoption-framework/scenarios/ai/strategy>|
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| Extend M365 Copilot with **task-specific agents** using declarative tools |**Agents for M365 Copilot** (via Copilot Studio & SDKs) | Purpose-built extensions that run inside M365 Copilot orchestrator | See tool comparison & planning guide. Sources: <https://learn.microsoft.com/microsoft-365-copilot/extensibility/declarative-agent-tool-comparison>, <https://learn.microsoft.com/microsoft-365-copilot/extensibility/planning-guide>|
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| Personal, **non-sensitive** queries with image creation |**Microsoft Copilot (consumer)**| Free web-grounded assistant | Don’t use for confidential work content. Source: <https://learn.microsoft.com/copilot/microsoft-365/which-copilot-for-your-organization>|
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| Employees want AI in **Word/Excel/PowerPoint/Outlook/Teams** with enterprise-grade protections |**Microsoft 365 Copilot**| Natively integrated experiences; work & web chat; governed by M365 controls | Requires org licensing; respects Microsoft Graph permissions. |
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| Build a **custom agent** quickly, connect business data, **automate** flows, publish to **Teams or web**|**Copilot Studio**| Low-code authoring, topics, knowledge sources, **agent flows**, Power Automate | Great for fusion teams; supports channels via Azure Bot Service.|
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| Develop a **RAG** app or **multi-agent** solution with fine control over models, evals, safety, and infra |**Azure AI Foundry (Azure AI Studio)**| Unified SDK/APIs, integrates Azure OpenAI & Cognitive Services, deep ops control | Best for pro-code; aligns with PaaS patterns in CAF. |
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| Extend M365 Copilot with **task-specific agents** using declarative tools |**Agents for M365 Copilot** (via Copilot Studio & SDKs) | Purpose-built extensions that run inside M365 Copilot orchestrator | See tool comparison & planning guide. |
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| Personal, **non-sensitive** queries with image creation |**Microsoft Copilot (consumer)**| Free web-grounded assistant | Don’t use for confidential work content. |
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</details>
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## Copilot Studio vs Azure AI Foundry (Azure AI Studio)
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|**Governance**| Power Platform governance, DLP, environment controls | Azure governance (RBAC, VNets, Private Link), CI/CD, responsible AI reviews |
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|**When to pick**| Rapid time-to-value; low-code; align with Power Platform ops | Need model choice, fine-grained data/infra control, complex pipelines & testing |
***Developers’ route**: Use the **Microsoft 365 Agents SDK** to build agents deployable across channels (M365 Copilot, Teams, web) with your preferred AI services.\
***Data readiness & access**: For M365 Copilot, review data exposure via Microsoft Graph permissions and labels; for Azure AI, plan grounding data stores and search.\
***Networking & isolation**: Azure PaaS workloads can use Private Link/VNet integration; consider egress controls and content filtering for AI endpoints.\
> - Need fastest productivity impact across M365? `Choose SaaS (M365 Copilot/Copilot Studio).`
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> - Building a domain copilot or RAG API with enterprise controls? `Choose PaaS (Azure AI Foundry).`
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> - Must run in tightly isolated environments or custom GPU stacks? `Choose IaaS.`
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> - Unsure? Start on `PaaS for speed + control; move edge cases to IaaS if required.`
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| Dimension | Microsoft Copilots | Azure AI Foundry | Self-managed on VMs/Kubernetes |
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|---|---|---|---|
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| Service model fit | Fastest path to value for productivity and common copilots | High control and customization for app/platform copilots | Maximum flexibility for bespoke/regulated builds |
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| Primary use cases | M365 Copilot, Copilot Studio solutions, plugin/Graph-powered automations | RAG apps, domain copilots, tool-use/orchestration, API integrations | Custom model hosting, air‑gapped or non-PaaS constraints, specialized GPUs |
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| Speed to value | Minutes to days | Days to weeks | Weeks to months |
| Model choice | Microsoft-hosted models inside M365 | Azure OpenAI, Azure AI model catalog (OSS/commercial), bring-your-own endpoints | Any model you deploy/manage (open‑source or licensed) |
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| Data readiness & access | Govern via Microsoft Graph permissions, sensitivity labels, Purview; minimize oversharing | Plan grounding stores (Azure AI Search, Cosmos DB, Storage); index and chunking strategy | You design data paths, stores, and indexing end‑to‑end |
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| Networking & isolation | Tenant/Service boundary managed by Microsoft | Private Link, VNet integration, Managed VNets, regional isolation | Full VNet/subnet control, firewalls, proxies, private DNS |
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| Egress control | Built-in guardrails, limited customization | Private endpoints, NSGs, UDRs, forced tunneling; restrict outbound to PaaS | You own all egress/policy controls |
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| Safety & content filtering | Built-in safety filters and enterprise policies | Azure AI Content Safety, safety system prompts, abuse monitoring options | DIY or integrate third‑party safety stack |
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| Compliance & data residency | Inherits Microsoft enterprise compliance in M365 | Choose Azure regions; align with org policies and regulators | Fully your responsibility to implement and evidence |
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| Identity & access | Entra ID + Microsoft Graph; Power Platform DLP | Entra ID (RBAC), Managed Identity, Key Vault, Azure Policy | Your IAM, secrets, RBAC, and policy framework |
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| Cost model | Per user/feature licensing | Consumption-based (tokens, search, storage, inference) | Infra + software + ops (VMs/GPU/K8s + licenses) |
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| Scaling & ops | Microsoft manages | Azure platform-managed with quotas and SLAs | You provision, scale, patch, monitor |
| Risks / trade‑offs | Less deep customization; feature roadmap dependency | Service quotas/limits; more components to secure | Highest ops burden; capacity planning and reliability on you |
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## FAQ
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### Q1. Is Copilot Studio only for chat?
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> It builds `agents` (beyond simple chat) that can call flows, connect to data, and act across channels (Teams/web).
> It builds `agents` (beyond simple chat) that can call flows, connect to data, and act across channels (Teams/web). Please read more about it here [Copilot Studio overview](https://learn.microsoft.com/microsoft-copilot-studio/fundamentals-what-is-copilot-studio)
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### Q2. When do I prefer Azure AI Foundry?
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> When you need `RAG/multi-agent`, model choice, evaluations, and deep integration/testing under your DevOps and networking controls.
> When you need `RAG/multi-agent`, model choice, evaluations, and deep integration/testing under your DevOps and networking controls. Please read more about it here [Extending Microsoft 365 Copilot with agents](#extending-microsoft-365-copilot-with-agents)
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### Q3. Can I extend Microsoft 365 Copilot with my own domain agent?
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> Yes—use `agents` (declarative) and related SDKs; see the tool comparison and planning guidance.
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> Yes—use `agents` (declarative) and related SDKs; see the tool comparison and planning guidance. Please read more about here [Declarative agents tool comparison](https://learn.microsoft.com/microsoft-365-copilot/extensibility/declarative-agent-tool-comparison), [Extensibility planning guide (agents for M365 Copilot)](https://learn.microsoft.com/microsoft-365-copilot/extensibility/planning-guide).
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