Dan Ness, Principal Analyst, MetaFacts, March 17, 2023
Summary
Microsoft announced an upcoming service for its Microsoft 365 service that integrates the user’s data using generative AI. Called Microsoft CoPilot, the service will first be offered to enterprises. This TUPdate measures the potential market of those most likely to adopt and benefit from the service.
The Microsoft CoPilot announcement
This week, Microsoft gave one of the most down-to-earth non-announcements among the many major companies exuberantly touting generative AI in some form. The announcement of Microsoft 365 CoPilot demonstrated how artificial intelligence capabilities might be deeply integrated into everyday Office 365 applications, especially those involving some creativity.
Microsoft has many challenges ahead to fulfill what was shown in the demo, including whether consumers, employees, or enterprises will be willing to share their words to be analyzed deeply. Also important will be whether the service adds enough value to counter the risk of getting the results wrong. After all, none of the generative AI tools to date have delivered on the promise of discernment.
Size of the market for creative activities
What we can do today is begin at the beginning – consider the size of the potential market. How many people are regularly doing any creative activities such as those illustrated in the demo? By starting with that assumption, the market size will be conservative. It’s more likely that people who need to get certain jobs done will look for the tool to assist them with what they are already doing. It’s less likely that a new tool will inspire many people to begin giving presentations or crafting videos. Just as buying a shiny new hammer doesn’t turn someone into a capable carpenter, nor does spicing up a spreadsheet make someone into a data analyst or executive decision-maker.
There are fewer potential users than Microsoft may hope, since just under half (46%) of all online American adults regularly do any of several major creative activities:
- Use professional creative software
- Create graphics/presentations
- Create videos
An even smaller share of online Americans regularly uses their connected devices for work-related creative activities. As of TUP/Technology User Profile 2022, 28% of online American adults actively use any of their devices for any of the creative activities identified.
| Regular creative activities among online Americans | |
| TUP/Technology User Profile 2022-US Table: CREATACTS | Universe-Online Adults |
| UNIV_AD: Universe-Online Adults (000) | |
| Universe-Online Adults (000) | 223,254 |
| Sample size | 7,508 |
| UDV_ANYDEV_ACTS_CREATIVE_SET: Creative activities (SET) | Universe-Online Adults |
| Creative-oriented – personal or work activities (NET) | 46% |
| Creative-oriented – personal activities (NET) | 39% |
| Creative-oriented – work activities (NET) | 28% |
Work-related creative activities
It makes sense that Microsoft would focus on enterprises initially for generative AI, if only because there is a higher concentration of clients already doing the creative activities that could conceivably benefit from CoPilot.
40% of employees working in organizations with 500 or more employees already actively do any of the three creative activities listed above. This represents over 22 million online American employees.
| Creative activities by employment | ||||
| TUP/Technology User Profile 2022-US | ||||
| Total | <20 Employees | 20-499 Employees | 500+ Employees | |
| Employees (000) | 119,603 | 34,963 | 29,415 | 55,225 |
| Sample size | 3,989 | 1,177 | 987 | 1,825 |
| % of employees | ||||
| Creative-oriented – work activities (NET) | 43% | 46% | 42% | 40% |
| Use professional creative software for work purposes | 30% | 33% | 29% | 28% |
| Create work graphics/presentations | 28% | 29% | 29% | 27% |
| Create videos for work purposes | 23% | 25% | 21% | 21% |
| Employees (000) | ||||
| Creative-oriented – work activities (NET) | 50,865 | 16,144 | 12,466 | 22,255 |
| Use professional creative software for work purposes | 35,438 | 11,403 | 8,536 | 15,499 |
| Create work graphics/presentations | 34,035 | 10,289 | 8,583 | 15,164 |
| Create videos for work purposes | 26,948 | 8,850 | 6,287 | 11,811 |
| Table: CREATACTSxEMPSIZE |
Among smaller organizations, both the percentage and number of employees make for a less attractive market. Furthermore, CoPilot appears to work much better when it is based on a large and comprehensive store of the user’s data. Enterprises are more likely to have richer datasets to draw on and sufficient IT/IS staff to bring it all together. Microsoft, or anyone else intent on offering services on top of enterprise data as intimate as chat sessions and email, will need to earn and deliver the security and trust that enterprises demand.
Work computers
To the extent that CoPilot requires an employer-provided work computer, Microsoft faces a long-term downdraft. Before the pandemic and economic perturbations, employer-provided work PC use had dropped.
Increasing the richness of Microsoft 365 through offerings like CoPilot may just help slow the trend away from work computers. Even so, if the AI does even a fraction of what is promised, it is likely that many of its capabilities would operate well with users bringing whichever device they favor – a smartphone, tablet, or even a smart speaker.
Windows ecosystem users are not the most creative
Stepping back to take a broader view, Microsoft also has a substantial interest in retaining users within its technology ecosystem. Currently, users of Windows computers aren’t the most creative, nor are Apple customers. The Americans with the highest share regularly doing creative activities are those who juggle multiple operating systems: Microsoft, Apple, and Google.
This suggests that for a service like CoPilot to succeed, it may work best if it is ecosystem agnostic or at least able to interoperate well with other environments. In other words, if the AI is smart, it will learn to play well with others.
| Creative activities by Apple, Windows usage | |||||||||
| TUP/Technology User Profile 2022-US Table: CREATACTSxECOSYS | Universe-Online Adults | Apple, not Windows, not Google | Windows and Apple, not Google | Windows and Google, not Apple | Google, not Windows, not Apple | not Google, not Windows, not Apple | Windows, not Google, not Apple | Windows and Google and Apple | Google and Apple, not Windows |
| UNIV_AD: Universe-Online Adults (000) | |||||||||
| Universe-Online Adults (000) | 223,254 | 50,055 | 45,112 | 43,082 | 26,846 | 17,694 | 17,145 | 14,524 | 8,796 |
| Sample size | 7,508 | 1,721 | 1,481 | 1,446 | 904 | 609 | 557 | 483 | 307 |
| UDV_ANYDEV_ACTS_CREATIVE_SET: Creative activities (SET) | Universe-Online Adults | Apple, not Windows, not Google | Windows and Apple, not Google | Windows and Google, not Apple | Google, not Windows, not Apple | not Google, not Windows, not Apple | Windows, not Google, not Apple | Windows and Google and Apple | Google and Apple, not Windows |
| Creative-oriented – personal or work activities (NET) | 46% | 44% | 53% | 46% | 39% | 28% | 39% | 65% | 54% |
| Creative-oriented – personal activities (NET) | 39% | 37% | 44% | 39% | 34% | 25% | 31% | 57% | 45% |
| Creative-oriented – work activities (NET) | 28% | 26% | 37% | 28% | 18% | 12% | 28% | 49% | 32% |
| Use professional creative software for personal or work purposes (NET) | 27% | 24% | 34% | 28% | 17% | 13% | 25% | 46% | 30% |
| Use professional creative software for personal purposes | 20% | 17% | 24% | 21% | 13% | 10% | 18% | 36% | 25% |
| Use professional creative software for work purposes | 19% | 17% | 26% | 19% | 11% | 9% | 17% | 34% | 20% |
| Create personal or work graphics/presentations (NET) | 26% | 22% | 33% | 28% | 17% | 12% | 23% | 44% | 28% |
| Create personal graphics/presentations | 19% | 16% | 24% | 20% | 13% | 10% | 15% | 30% | 21% |
| Create videos for personal or work purposes (NET) | 33% | 33% | 37% | 31% | 31% | 22% | 25% | 45% | 41% |
| Create work graphics/presentations | 19% | 16% | 26% | 20% | 11% | 7% | 17% | 35% | 21% |
| Create videos for personal purposes | 28% | 28% | 31% | 26% | 29% | 20% | 20% | 39% | 35% |
| Create videos for work purposes | 15% | 14% | 18% | 14% | 11% | 8% | 13% | 26% | 18% |
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Indexing
Lenses: Technology Ecosystems; Activities; PCs
Tables: CREATACTSxEMPSIZE, WORKPCxTUPWAVE, CREATACTSxECOSYS
Tags: Activities, Android, Apple, Creative, Employees, Employment status, Generative AI, Google, Graphics, iPad, iPhone, Market penetration, Microsoft, Microsoft Windows, Operating systems, PC activities, PCs, Penetration, Personal activities, Productivity, Technology Ecosystems, Video editing, Windows, Work PCs, Work-related activities
Waves: TUP 2013, TUP 2014, TUP 2015, TUP 2016, TUP 2017, TUP 2018, TUP 2019, TUP 2020, TUP 2021, TUP 2022
Item: TUP_doc_2023_0317_huma