Integrating Azure AI Foundry with Copilot Studio: A Strategic and Technical Overview
As organizations accelerate their AI adoption, the need for flexible, scalable, and secure platforms becomes paramount. My previous article, Navigating AI Solutions: Microsoft Copilot Studio vs. Azure AI Foundry | Microsoft Community Hub, represented two powerful yet distinct approaches to building AI agents. While Copilot Studio offers a low-code/no-code interface for rapid deployment, targeting any kind of business user, Azure AI Foundry provides a pro-code environment with deep customization and orchestration capabilities, targeting developer audiences. But what if you would not need to decide between one or the other, but benefit from integrating both platforms and unlock transformative business value across all teams? This is exactly the question I got asked increasingly while I was teaching our “Copilot, Copilot Studio and Azure AI Foundry” Instructor Led Training courses as a Microsoft Technical Trainer. This article starts with the business rationale for integration. From there, I will continue with detailing the influence of cost and ROI parameters as part of decision-making. Last, I will guide you through multiple technical integration capabilities available today, and how both platforms can complement each other. Business Rationale for Integration Copilot Studio is primarily designed for business users to build conversational agents quickly. It excels in rapid prototyping, using a graphical workflow-style interface, identical to Power Automate. Users don’t require much development skills to build such agents. Azure AI Foundry, on the other hand, is tailored for developers and data scientists who are typically in need of model orchestration, customized tool integration and enterprise-grade scalability and governance. Integrating both platforms allows organizations to bridge the gap between business agility and technical depth, enabling the ones closer to the business to prototype while developers can focus on custom features, refining and scale. For example, organizations can start with Copilot Studio for customer-facing bots or internal assistants, but then later, transition to Azure AI Foundry for more complex workflows, multi-agent orchestration or custom model integration. This layered approach supports progressive AI maturity, allowing teams to evolve from simple agents to fully sophisticated AI ecosystems. Cost and ROI Considerations Copilot Studio billing vs Azure AI Foundry consumption cost billing As users interact with Copilot Studio agents, or as the agents perform tasks on behalf of users, users consume Copilot Studio messages. Copilot Studio messages are the key component influencing the monthly cost of using Copilot Studio. Capabilities are available via the Copilot Studio pay-as-you-go meter (pay per message) and the Copilot Studio message pack subscription (25,000 messages monthly) license, or a combination of both. These license options are active on tenant-level. Any user with a Microsoft 365 Copilot license gets access to Copilot Studio, with no message-based charge. More details are available in the Microsoft Copilot Studio Licensing Guide. Azure AI Foundry is part of Azure’s consumption-based model, where you do not get charged for Azure AI Foundry itself, but you get charged a consumption cost for the different models your applications use. This charge can be listed as Microsoft (e.g. Azure OpenAI) or charged through the Azure marketplace (e.g. Cohere). Image: Azure AI Foundry model cost consumption overview from within Azure Cost Analysis Depending on the AI solution architecture your application workloads are based on, you should also take other Azure costs into account such as Azure Storage Accounts, Azure AI Search, Azure App Services, Azure Key Vault and alike. Since Azure AI Foundry charges are identical to any other Azure Resource charges, managing these is not different than your current Azure Cost Analysis approach. ROI and Budget alignment From the previous section, it should be clear that allocating the right budget can become complex, depending on the AI platforms used. By integrating both platforms, organizations can achieve cost optimization, by using Copilot Studio for lightweight tasks but scaling via Azure AI Foundry for compute-intensive operations. Given the lower complexity of building applications with Copilot Studio, they tend to result in early ROI, through Copilot Studio’s fast deployment. Azure AI Foundry’s robust and extensible infrastructure could lead to a longer-term value of ROI optimization. Technical Integration Capabilities HTTP Request Trigger One integration method involves using Copilot Studio’s HTTP Request feature to trigger Foundry Agents. This allows for Natural language prompts in Studio to initiate backend processes in Azure AI Foundry. This allows users to benefit from a seamless flow between conversational UI and enterprise logic, to consult business data, run data analytics or retrieve information across different enterprise application backends. Image: HTTP Request setup within Copilot Studio Topic MCP Protocol Azure AI Foundry now supports Model Context Protocol (MCP), an open standard enabling seamless interaction between large language models (LLMs) and external tools, systems or data sources. MCP provides a model-agnostic interface for tasks such as reading files, executing functions, and handling contextual prompts. Its primary goal is to simplify the integration of LLMs with third-party systems by addressing the complexity of building custom connectors for each tool or data source. MCP Tools can be integrated into your AI solutions using Azure AI Foundry Agent Service or through common development language SDKs or REST API. Check this Microsoft Learn module for more technical details on how to configure this or check out MCP-for beginners on YouTube https://aka.ms/MCP-for-beginners. Recently, the Model Context Protocol (MCP) Connector also became available as a new tool directly within Copilot Studio. Image: Model Context Protocol Connector Tool in Copilot Studio By integrating MCP Tools from within either Foundry Agent Service or through Copilot Studio, the organization can benefit from the standardized approach to allow connectivity to different enterprise systems, data endpoints or external applications. Simplifying the complexity and providing a smooth interaction irrespective of the AI platform used, provides major benefits to both business users and developer teams building these applications. Azure AI Foundry Models available to Copilot Studio (preview feature) Azure AI Foundry Models provides +11,000 models for you to choose from, offered by both Microsoft and an extensive range of model providers such as OpenAI, DeepSeek, Black Forest Labs, Meta and many more. On top of existing models offered, organizations can also create their own customized models by fine-tuning from within Azure AI Foundry. For example, imagine an organization building an IT support agent, which interacts with end-users using a chat interface and natural language. Users might be able to provide screenshots of errors, as well as describe technical issues in their own words. Traditional LLMs could struggle with recognizing specific screenshot details or business-specific terminology used by custom in-house developed applications, as they are not trained in this kind of information. That’s where fine-tuned models could be a solution. At the time of writing this article, a new preview feature became available to Copilot Studio customers, allowing them to use any Azure AI Foundry model, both catalog and fine-tuned ones, as the primary model for their Copilot Studio Agents. (FYI, follow this link for all details on the Copilot Studio Roadmap and features list) Image: Copilot Studio New Feature setting to enable AI Foundry model integration Conclusion Integrating Copilot Studio and Azure AI Foundry is not just a technical exercise, but rather a strategic move which aligns business goals, cost efficiency, and adoption readiness. By leveraging the strengths of both platforms, organizations can build AI solutions that are agile, scalable, and secure. Your business can focus on developing (or ‘making’ if not code-based) AI Agents, without facing bottlenecks or unneeded complexity or isolation of workloads. Instead of asking the question of which platform to use for building AI applications, organizations should invest in and benefit from a tight integration between both platforms, quickly enabling teams from both the business side as well as developers, to create AI-influenced applications that provide immediate business value, without compromise. #MicrosoftLearn #SkilledByMTTThe Future of AI: Developing Lacuna - an agent for Revealing Quiet Assumptions in Product Design
A conversational agent named Lacuna is helping product teams uncover hidden assumptions embedded in design decisions. Built with Copilot Studio and powered by Azure AI Foundry, Lacuna analyzes product documents to identify speculative beliefs and assess their risk using design analysis lenses: impact, confidence, and reversibility. By surfacing cognitive biases and prompting reflection, Lacuna encourages teams to validate assumptions through lightweight evidence-gathering methods. This experiment in human-AI collaboration explores how agents can foster epistemic humility and transform static documents into dynamic conversations.Integrate Custom Azure AI Agents with CoPilot Studio and M365 CoPilot
Integrating Custom Agents with Copilot Studio and M365 Copilot In today's fast-paced digital world, integrating custom agents with Copilot Studio and M365 Copilot can significantly enhance your company's digital presence and extend your CoPilot platform to your enterprise applications and data. This blog will guide you through the integration steps of bringing your custom Azure AI Agent Service within an Azure Function App, into a Copilot Studio solution and publishing it to M365 and Teams Applications. When Might This Be Necessary: Integrating custom agents with Copilot Studio and M365 Copilot is necessary when you want to extend customization to automate tasks, streamline processes, and provide better user experience for your end-users. This integration is particularly useful for organizations looking to streamline their AI Platform, extend out-of-the-box functionality, and leverage existing enterprise data and applications to optimize their operations. Custom agents built on Azure allow you to achieve greater customization and flexibility than using Copilot Studio agents alone. What You Will Need: To get started, you will need the following: Azure AI Foundry Azure OpenAI Service Copilot Studio Developer License Microsoft Teams Enterprise License M365 Copilot License Steps to Integrate Custom Agents: Create a Project in Azure AI Foundry: Navigate to Azure AI Foundry and create a project. Select 'Agents' from the 'Build and Customize' menu pane on the left side of the screen and click the blue button to create a new agent. Customize Your Agent: Your agent will automatically be assigned an Agent ID. Give your agent a name and assign the model your agent will use. Customize your agent with instructions: Add your knowledge source: You can connect to Azure AI Search, load files directly to your agent, link to Microsoft Fabric, or connect to third-party sources like Tripadvisor. In our example, we are only testing the CoPilot integration steps of the AI Agent, so we did not build out additional options of providing grounding knowledge or function calling here. Test Your Agent: Once you have created your agent, test it in the playground. If you are happy with it, you are ready to call the agent in an Azure Function. Create and Publish an Azure Function: Use the sample function code from the GitHub repository to call the Azure AI Project and Agent. Publish your Azure Function to make it available for integration. azure-ai-foundry-agent/function_app.py at main · azure-data-ai-hub/azure-ai-foundry-agent Connect your AI Agent to your Function: update the "AIProjectConnString" value to include your Project connection string from the project overview page of in the AI Foundry. Role Based Access Controls: We have to add a role for the function app on OpenAI service. Role-based access control for Azure OpenAI - Azure AI services | Microsoft Learn Enable Managed Identity on the Function App Grant "Cognitive Services OpenAI Contributor" role to the System-assigned managed identity to the Function App in the Azure OpenAI resource Grant "Azure AI Developer" role to the System-assigned managed identity for your Function App in the Azure AI Project resource from the AI Foundry Build a Flow in Power Platform: Before you begin, make sure you are working in the same environment you will use to create your CoPilot Studio agent. To get started, navigate to the Power Platform (https://make.powerapps.com) to build out a flow that connects your Copilot Studio solution to your Azure Function App. When creating a new flow, select 'Build an instant cloud flow' and trigger the flow using 'Run a flow from Copilot'. Add an HTTP action to call the Function using the URL and pass the message prompt from the end user with your URL. The output of your function is plain text, so you can pass the response from your Azure AI Agent directly to your Copilot Studio solution. Create Your Copilot Studio Agent: Navigate to Microsoft Copilot Studio and select 'Agents', then 'New Agent'. Make sure you are in the same environment you used to create your cloud flow. Now select ‘Create’ button at the top of the screen From the top menu, navigate to ‘Topics’ and ‘System’. We will open up the ‘Conversation boosting’ topic. When you first open the Conversation boosting topic, you will see a template of connected nodes. Delete all but the initial ‘Trigger’ node. Now we will rebuild the conversation boosting agent to call the Flow you built in the previous step. Select 'Add an Action' and then select the option for existing Power Automate flow. Pass the response from your Custom Agent to the end user and end the current topic. My existing Cloud Flow: Add action to connect to existing Cloud Flow: When this menu pops up, you should see the option to Run the flow you created. Here, mine does not have a very unique name, but you see my flow 'Run a flow from Copilot' as a Basic action menu item. If you do not see your cloud flow here add the flow to the default solution in the environment. Go to Solutions > select the All pill > Default Solution > then add the Cloud Flow you created to the solution. Then go back to Copilot Studio, refresh and the flow will be listed there. Now complete building out the conversation boosting topic: Make Agent Available in M365 Copilot: Navigate to the 'Channels' menu and select 'Teams + Microsoft 365'. Be sure to select the box to 'Make agent available in M365 Copilot'. Save and re-publish your Copilot Agent. It may take up to 24 hours for the Copilot Agent to appear in M365 Teams agents list. Once it has loaded, select the 'Get Agents' option from the side menu of Copilot and pin your Copilot Studio Agent to your featured agent list Now, you can chat with your custom Azure AI Agent, directly from M365 Copilot! Conclusion: By following these steps, you can successfully integrate custom Azure AI Agents with Copilot Studio and M365 Copilot, enhancing you’re the utility of your existing platform and improving operational efficiency. This integration allows you to automate tasks, streamline processes, and provide better user experience for your end-users. Give it a try! Curious of how to bring custom models from your AI Foundry to your CoPilot Studio solutions? Check out this blog
Ignite 2024: Streamlining AI Development with an Enhanced User Interface, Accessibility, and Learning Experiences in Azure AI Foundry portal
Announcing Azure AI Foundry, a unified platform that simplifies AI development and management. The platform portal (formerly Azure AI Studio) features a revamped user interface, enhanced model catalog, new management center, improved accessibility and learning, making it easier than ever for Developers and IT Admins to design, customize, and manage AI apps and agents efficiently.
