Inside Microsoft’s plans to reshape M365 apps with AI

Microsoft had an early software hit when it released Office for Windows 3.0 nearly 35 years ago. The graphical user interface got users away from command-line interfaces and into a new world of productivity.

Since then, the company has kept up with the changing way people work. Office 365 (now Microsoft 365) was its adaptation to the collaborative era of the cloud. And now, another major transition is under way — into the generative AI (genAI) era, with Copilot at the center of the strategy to work smarter. 

Microsoft is positioning Copilot as a tool (or series of tools) for users to create, tap into and act on insights at individual, team, and organizational levels. The company also sees genAI as a way to break down the barriers between Word, Excel, PowerPoint and other apps; help users create their own apps; and declutter app user interfaces so features are easier to access.

Computerworld sat down with Microsoft’s Aparna Chennapragada, chief product officer of experiences and devices, to get an inside look at how the company is integrating genAI throughout its productivity apps.

Aparna Chennapragada, chief product officer of experiences and devices for Microsoft.
Microsoft

What stage are you at with Copilot in Microsoft’s productivity suites? “Our first wave brought AI to existing apps like Word, Excel, PowerPoint, Outlook, Teams for tasks like summarizing documents, prioritizing emails, recapping meetings, writing summaries, action items for meetings. As models improved at reasoning, they can now connect insights within a 200-page document way beyond human cognition.

“The second wave is M365 Copilot as a hub beyond the apps you use today. We’re building the AI hub — the productivity browser for the AI world, the one place you start and end your day. It’s a digital chief of staff, a digital assistant to stay on top of information, ask questions, and get coherent answers from the entire data of your organization and the world.”

Is there a fundamental redesign in bringing Copilot into the interface? If I’m using my desktop app, how are you thinking about that? ”We’re going for ‘hub and spokes’ — that’s the model we’re going for. You have a productivity hub, a full app that gives all the power [of Copilot], and then embedded AI in each app that you work with.

“You will have an app on Windows, on Mac, on your phone, and of course the website. That is your hub. Think about this as the full power of Copilot, the best of AI that Microsoft brings to work.

“When you’re in a document or meeting, you’ll have a narrow Sidekick presence that focuses on relevant tasks that will surface information in a thoughtful way. You have the embedded AI in each of these apps you work with.

“In a Word document, you’re unlikely to ask, ‘What’s the weather?’ But if you had this almost like a narrow Sidekick presence, then you say, ‘Im going to act on this document. Help me with this.’”

We’ve thought of Office apps as being separate. How do you break those classic Word/Excel/PowerPoint walls? How are you coupling them? ”For folks in an organization, some subsets are deeply specialized. If you’re a coder, you live in GitHub; if you’re a lawyer, you live in Word; if you’re an analyst, you live in Excel. For those cases, we want to bring the AI to where you are.

“The lines are blurred and you start with your goal. That’s why we built M365 Copilot app as a hub. You start by saying, ‘I want to write a report. I want to riff on it’ — almost thought processing versus word processing.

“Then you go back and forth. The great thing here is that at the last mile, you can turn that into a Word document, a deck, an email, and all of the above.”

Is it time to change the user interface with the closer coupling of Word, Excel, PowerPoint via Copilot? Looking into the future, will these individual apps still exist or merge into something else? ”We think about this like a pyramid structure. There’s going to be a broad base where every employee would use the universal UI — we call Copilot the UI for AI. 

“As models get better and product making gets better, as we harness work data — we think about how to securely and compliantly bring work and world data together. You get 70% of the way there in most cases. Then you have a higher value artifact — you create it through chat. 

“In M365 Copilot, we launched Pages. Think of this as a universal file format across Word, Excel, PowerPoint, and…these are AI-forward documents. Once created, you can parlay that into specialized apps and tools.”

It sounds like Pages is similar to XML that will help bring Word, Excel and PowerPoint closer. ”It’s very interesting actually. We GAed this four months ago and we see people create these. Initially, when you start conversations with Copilot, you’re riffing ideas and then hit on some version. You’ve co-processed with AI and now have something of high value.

“We’re seeing people want to move that into a high-value artifact they can go back to. No one does their work in a day. You have these long-lasting things.

“Then folks ask, ‘Is this persistent? Can I share it with my team?’ So, we introduced Pages and said, ‘You don’t have to be prescriptive about the format.’ This is just a canvas as a holder, a universal AI. What is a document in the AI era? From there you can branch off into any file format.”

How are you moving beyond chat interfaces? “While chat offers zero learning curve, some things are more efficient with GUIs. We’re introducing ‘Notebooks’ as an AI canvas for projects — gathering information, iterating on outlines, and working in the background to deliver insights rather than relying on chat. This represents a shift from ‘DOS to GUI’ in the AI world.”

Will Copilot and AI features be available offline? Can I use it on local hardware if I’m somewhere with poor connectivity? “We want universal features to be accessible to everyone. We’re looking at Copilot PCs with local models running on NPUs to provide an acceptable offline feature set.

“We’re working on three key factors: retaining feature power to be useful with spotty connections, managing the model footprint, and creating a seamless orchestration layer that switches between offline capabilities and cloud resources when you’re back online.

“All of these we’re working on. The idea is that as a user, you should have access to intelligence and products wherever you are, at least in these specific ecosystems.”

When you talk about offline productivity, is it a localized model like Microsoft’s homegrown Phi Silica? Or is the AI built into Windows via a driver interface like DirectML or similar? ”It’s an ensemble of local models. The first era of local models was small footprint models. What we are doing is our teams are also looking at post-training these models for specific use cases. 

“For example, for writing-versus-analysis-versus-something else or image creation, we’re making sure these things fit the needs of core users for that situation. We use pipeline, we use open-source models.”

It seems like users might create their own apps without seeing Excel or Word working in the background. Is that capability coming — bringing GitHub’s power to users — and when? ”You have a good prediction model of our roadmap. Once we can generate code, you can create lightweight apps on the fly. 

“For example, in the Analyst agent we just rolled out, which is a data scientist in a box, I asked it to analyze F1 stats from 2024. I didn’t provide a dataset — I just said search the web for World Bank data and NBA stats, then tell me what’s insightful.

“While that’s an idle pursuit for me, imagine turning that towards work. Internally, we’ve used it to connect to sales data and identify anomalies in scatter plots. As a customer, you don’t care if it’s writing an app, using Excel, or something else — that’s how we’re designing it.

“We see Copilot as the browser with specialized agents working for you. Then there’s a whole slew of invisible tools. We’re building many Office assets as tools so you can simply request a properly cited Word document in a particular format without thinking about the underlying technology.”

Outlook is a daily starting point for many users, but it is confusing — it seems separate from 365 and comes in the Classic and New versions. How are you planning to integrate Copilot there? ”Watch this space. After this meeting, my next session is with the Outlook team where we are going deep into useful scenarios.

“If you think about what’s happening today, even [CEO] Satya [Nadella] mentioned this — no one grew up dreaming they’d wake up every morning to sort through 500 emails and mark 30 as spam. These are gears and mechanisms we use to get work done.

“One of our motivating principles is recognizing that modern work involves 30%-40% core productive work and then a lot of work to manage the work itself — coordination, communication, figuring stuff out, scheduling meetings. Right now, we’re all turning these gears manually, but AI should be able to handle much of that overhead for us.

“We’re looking at how Copilot can help with Outlook by advising on how you’re using time throughout your week, highlighting the most important items requiring your attention, and in some cases helping draft response points or summaries of complex email threads.

“The goal is to remove that administrative overhead so you can focus on the meaningful work rather than the work about work.”

Is your goal with AI to ultimately declutter interfaces like Word and Excel that have too many icons? I get confused sometimes when using Classic Outlook or Word. ”One-hundred percent. Today, there’s such depth in these apps from years of adding valuable features for enterprise users. Traditionally, we faced a trade-off between learning curve and power usage — feature discovery is hard, but once you do, it’s very powerful.

“With AI, we can eliminate that trade-off. You’ll still need to learn how to ask for things, but it’s much easier than learning tools from the ground up.

“Power users can keep their muscle memory while we democratize that power to everyone through Copilot, making those accumulated enterprise features accessible to everybody.”

How are you approaching third-party plugins like Adobe Express? And regarding security, how do you manage appropriate data access with AI handling so much information? ”For plugins, we think there will be high-value tools Microsoft builds, but also many created by others. We’ve seen over 100,000 agents and flows built with Microsoft Copilot Studio already. We aim to provide an agent store where you can discover, install, and pin these tools — making it not just a product but a platform. Some plugins might serve just three people, while others like Adobe Express will reach millions.

“Regarding security, our unique responsibility has three aspects: First, bringing work data together with world knowledge, like combining latest competitor news with internal company data for sales prep. Second, integrating into existing workflows people already use. And third — most importantly — doing this securely, with privacy preservation and compliance. 

“Our Copilot control system gives IT admins a complete view of all activities and deployed agents, with controls to manage everything and strong guarantees on security and compliance.”