Microsoft Copilot or ChatGPT: which fits your SMB?

Copilot or ChatGPT: why people compare them

At work, Copilot and ChatGPT almost always come up in the same breath. And that's where the comparison usually goes wrong. People line up feature lists, tick boxes, and pick based on price or whichever brand they recognise.

It's the wrong question. These aren't competing chairs at the same table. Copilot is a productivity layer on top of the work your team already does in Office. ChatGPT is an open workspace you go to when you want to make something. Different things, different place in your day.

Half the SMBs I talk to buy the wrong one, or buy one when they actually need both. This piece makes the choice concrete: what they are, where the value sits, and which fits which type of business.

What is Microsoft Copilot, exactly?

Copilot isn't a product, it's a brand. Microsoft 365 Copilot, GitHub Copilot, Sales Copilot, Studio Copilot: all different things under the same name. For SMBs the conversation is almost always about Microsoft 365 Copilot, the assistant embedded in Word, Excel, PowerPoint, Outlook and Teams.

Under the hood, Copilot runs on GPT-4 (and newer models) through Azure OpenAI, with a Microsoft safety layer on top. The real value isn't in the model, it's in the Microsoft Graph. Copilot sees your emails, calendar, Teams chats, SharePoint and OneDrive. Ask "summarise last week's discussion" and it knows which one you mean. That's the difference with a standalone chatbot where you have to paste everything in.

Hosted on Azure, EU data residency by default for business tenants, GDPR well covered out of the box. Microsoft already has your data, so adding Copilot doesn't add a new processor to your register. For SMBs with data sovereignty concerns that saves a lot of contract work.

Pricing sits around $30 per user per month for Microsoft 365 Copilot, on top of your M365 E3 or E5. Cheaper variants like Copilot Business and Copilot Pro now exist too. Rates shift, so check the current list before you decide.

Strong at: anything happening in Office. Excel formulas, summarising email threads, building a PowerPoint deck from a brief, summarising Teams meetings. The kind of time savings you feel daily.

What is ChatGPT, exactly?

ChatGPT is OpenAI's flagship. Four flavours: free, Plus for individuals, Team for groups, Enterprise for larger organisations. Under the hood, GPT-5 and GPT-4 models run, with DALL-E for image and Whisper for audio built in.

Hosting is in the US. EU data residency has existed since 2025, but only on Enterprise, Edu and the API. On Plus and Team, US hosting remains the default. For customer or employee data that's a watch point. Since Plus, input is no longer used for model training, which addresses a major concern, but it doesn't change where the data physically sits.

Pricing is around $20 per user per month for Plus, Team in the same range or slightly above, Enterprise on custom pricing. For a 10-person team on Team tier you're at a few hundred euros per month.

Strong at: open conversations without context baggage, image generation via DALL-E, code, voice mode, and Custom GPTs (your own mini-bots set up per team or use case). It's the workbench where you make things, not the assistant that looks over your shoulder.

Side-by-side comparison

Two things the table doesn't show. On pure writing quality in Dutch (and English) ChatGPT has the edge, especially on creative work. In the Office context Copilot wins because it knows what you're working on. A feature matrix doesn't capture that; the kind of work you do does.

When do you pick Copilot?

Copilot is the logical choice when your organisation already runs fully on Microsoft 365 (E3 or E5), your employees mainly work in Word, Excel, Outlook and Teams, and you need GDPR plus EU data residency without Enterprise budget. Power Automate for workflows, IT governance with strong admin controls, and the context Copilot pulls from your emails and calendar: that's where it earns its keep.

For finance, HR, accountants and general office work that lives around Office, it's immediate productivity. Excel formulas you'd otherwise have to look up. A 50-email thread summarised in two sentences. Not sexy, but worth real money daily.

When do you pick ChatGPT?

ChatGPT is the logical choice when you generate a lot of text for marketing, content or communications, when image or code work plays a role, or when you want open conversations without M365 context for brainstorming and research. Custom GPTs per team or use case, no Microsoft ecosystem lock-in, and a faster pace of new features than any single Microsoft product matches.

Marketing and content teams usually pick ChatGPT (or Claude). Writing quality is stronger, image generation is built in, and longer creative pieces feel more natural. See also AI in marketing and content for how to operationalise this.

The hybrid approach (often the best answer)

Nine out of ten conversations I have on this end not in a choice, but in a combination. M365 Copilot for admin, productivity and everything inside Office. ChatGPT Team (or Claude Team) for creative work, content, research and open conversations. On top of that, sometimes specific gear: a local model for sensitive data, GitHub Copilot for developers, Recraft or Midjourney for image production.

Looks expensive. Do the math: $30 plus $25 per user per month for the baseline. For most SMBs that's not the bottleneck. The win comes from your team grabbing the right tool per task, instead of getting stuck because one tool lacks the context the other has.

Real-world cases per business type

10-FTE marketing agency without M365. ChatGPT Team for content and image, optionally Claude Pro per person for long-form writing. No Copilot, because there's no M365 foundation and pure content production gets nothing extra from it.

25-FTE accounting firm on M365. Copilot for Excel, Outlook and Teams, because that's where the work happens. On top, a few separate ChatGPT or Claude licences for the people who regularly write longer pieces. GDPR for the bulk of work covered by Copilot.

50-FTE tech company on M365. Copilot for general productivity, GitHub Copilot for developers, separate ChatGPT or Claude licences for marketing and design. Three tools, clearly split per function, no one fighting over the same chair.

5-FTE startup without M365. ChatGPT Plus per person, optionally Claude alongside for longer documents. Copilot has no use here because the M365 context that creates its value is missing.

What about privacy and GDPR?

For many SMBs this is the heaviest factor. Practical state of play in 2026.

For Copilot, Microsoft Graph data stays inside your tenant and EU hosting via Azure is the default. For SMBs with GDPR concerns this is the least-friction route. Microsoft already has your emails and documents, so switching on Copilot doesn't add an extra processor to your register. Administratively, that's just a nicer position to be in.

With ChatGPT, since Plus, input is no longer used for model training, an important guarantee. But hosting stays in the US unless you're on Enterprise or API with EU residency. For customer data, personal data or contracts inside a regular Team account, that's a watch point you'd want your data protection officer involved in.

Not black and white. ChatGPT on Team is safer than a free chatgpt.com account, but less locked down than Copilot in M365 Enterprise. What fits depends on the kind of data you handle. For a deeper overview of options alongside these two, see ChatGPT alternatives for SMB.

AI literacy: regardless of your choice

From February 2025, the AI Act (article 4) requires your employees to be AI-literate when they use AI at work. That applies to Copilot, to ChatGPT, and to everything in between. Buying an expensive tool without your team knowing what a sensible prompt looks like, what they may and may not put in, and how to critically assess output, is wasted money and a compliance risk at the same time.

Get basic training in place at introduction. Not a three-day workshop, just half a day where the team learns: what can I do with it, what not, what are the rules in our company, how do I write a useful prompt. See AI Act article 4 for SMBs for the legal background, and AI training for your team for how DataDream approaches this.

Frequently asked questions

Which is better for SMBs: Copilot or ChatGPT?

Neither is universally better. Copilot is stronger if you run on Microsoft 365 and work a lot in Office. ChatGPT is stronger for creative writing, image and open conversations. Most SMBs in practice benefit from both.

Can I use both at the same time?

Yes, and that's usually the smartest route. Copilot for productivity inside Office, ChatGPT for creative and open work. Costs go up a bit, but the productivity gain per employee is bigger than the subscription difference.

Which is safer for GDPR?

Microsoft Copilot is the most GDPR-friendly out of the box for SMBs, because it has EU hosting via Azure by default and data stays inside your tenant. ChatGPT requires Enterprise or an API implementation with the EU data residency option to reach the same level. For customer data or sensitive business information, that distinction matters.

Does Copilot work without Microsoft 365?

Microsoft 365 Copilot needs an M365 licence (E3 or E5) to deliver its value. Microsoft does offer separate Copilot Pro and Copilot Business for customers without full M365, but you then miss the native integration with Word, Excel and Teams that's the main reason to pick Copilot.

Does ChatGPT have Excel integration?

Not native like Copilot, but through Advanced Data Analysis (built into Plus and Team) you can upload Excel or CSV files and have them analysed. It just doesn't work inside Excel itself: you go from Excel to ChatGPT and back. For people who live in Excel, Copilot remains more practical.

What does Copilot cost for 20 employees?

Microsoft 365 Copilot starts from around $30 per user per month. For 20 employees that's roughly $600 per month, on top of your existing M365 subscription. Cheaper variants like Copilot Business can reduce that figure. Check current pricing, since Microsoft adjusts it regularly.

Which is better for writing?

For pure copywriting and creative writing, ChatGPT (or Claude) is generally stronger than Copilot. Copilot is good for business writing in Word with context, but for blog posts, marketing copy or longer creative pieces, the pure chat tools deliver more natural results.

Which one fits your business?

The choice between Copilot and ChatGPT (or both) depends on where your employees work, how sensitive your data is, and what kind of work you do. DataDream helps SMBs with this decision: which combination, how to roll it out, how to make it GDPR-proof, and how to bring your team along.

For deeper ChatGPT context (Dutch-language quality, prompts, GDPR routes), see ChatGPT in Dutch: a 2026 guide for SMBs and scale-ups. For Copilot Studio (the Power Platform low-code agent builder) versus custom agents, see Copilot Studio: a 2026 guide for Dutch businesses.

Not sure which fits? Take the free AI Scan to see where your biggest opportunities are, or request an AI Quickscan for use-case-specific advice.