To connect our MCP Server to a Microsoft Copilot Studio agent, Microsoft licensing requirements differ from standard Copilot Studio agents.
The most important requirement is that MCP tools are only supported with Generative Orchestration. Agents using Classic Orchestration cannot use MCP servers.
The Copilot Studio for Teams capability included with some Microsoft 365 subscriptions only supports Classic Orchestration. It cannot be used with our MCP Server.
Required licenses
There are three licensing areas to consider:
- Maker (agent developer)
- Organization (tenant)
- End users
1. Maker requirements
The person creating or maintaining the Copilot Studio agent must have one of the following:
- Microsoft 365 Copilot license
- Copilot Studio author access assigned through the Power Platform admin center
This allows the maker to:
- Create Copilot Studio agents
- Enable Generative Orchestration
- Configure MCP tools
- Publish agents to Microsoft Teams or other supported channels
A Copilot Studio trial license can be used for testing, but agents created with a trial cannot be published.
2. Organization (tenant) requirements
Your Microsoft tenant must have Copilot Studio capacity available.
This is provided through Copilot Credit capacity packs (sometimes referred to as the "tenant license").
A capacity pack provides:
- Organization-wide Copilot Studio entitlement
- A shared monthly pool of Copilot Credits
- Runtime capacity for all Copilot Studio agents in the tenant
At the time of writing, one capacity pack provides 25,000 Copilot Credits per month. Unused credits do not roll over.
3. End-user requirements
Users interacting with the published agent do not need a Copilot Studio license.
Once the agent is published and shared, users can access it through Microsoft Teams or any other supported channel according to your sharing permissions.
Copilot Credits consumption
Although end users do not require a license, their usage consumes Copilot Credits from your organization's tenant.
Credits are consumed whenever the agent performs work such as:
- Generating AI responses
- Calling actions
- Invoking MCP tools
- Using premium AI capabilities
The number of credits consumed depends on the complexity of each interaction.
Microsoft 365 Copilot users
Users with a Microsoft 365 Copilot license receive special billing treatment.
When they interact with agents in Microsoft Teams, Microsoft 365 Copilot Chat, or SharePoint, standard agent interactions such as classic answers, generative answers, Microsoft Graph grounding, and standard agent actions do not consume Copilot Studio credits.
Custom integrations, including MCP Server tool execution, may still consume Copilot Credits because external tools require additional agent processing.
Minimum licensing required for our MCP Server
| Scenario | Requirement |
|---|---|
| Create an agent using MCP | Microsoft 365 Copilot or Copilot Studio author access |
| Enable Generative Orchestration | Required |
| Connect to our MCP Server | Supported only with Generative Orchestration |
| Publish the agent to Microsoft Teams | Supported |
| Organization capacity | Copilot Credit capacity pack |
| End users | No Copilot Studio license required |
| Runtime usage | Consumes Copilot Credits |
Frequently Asked Questions
Can I use the free Copilot Studio for Teams version?
No. Copilot Studio for Teams only supports Classic Orchestration. Since MCP servers require Generative Orchestration, this version cannot be used.
Do all users need Microsoft 365 Copilot?
No. Users can interact with the published agent without a Microsoft 365 Copilot license. However, their interactions consume your organization's Copilot Credits.
Is a Copilot Studio trial sufficient?
No. The trial allows you to build and test agents, but it does not allow published production agents.
What is a tenant license?
Microsoft documentation previously referred to an organization-wide tenant license. Today this is effectively provided through Copilot Credit capacity packs, which supply the shared Copilot Credits used by all Copilot Studio agents within your tenant.
Summary
- The agent must use Generative Orchestration.
- Copilot Studio for Teams is not sufficient.
- The maker needs Microsoft 365 Copilot or Copilot Studio author access.
- The organization needs Copilot Credit capacity.
- End users do not need a Copilot Studio license.
- Agent usage, including MCP tool execution, consumes Copilot Credits.
Microsoft licensing changes frequently. Always refer to the latest Microsoft Copilot Studio Licensing Guide or consult your Microsoft licensing representative before making purchasing decisions.