On the show this week, Paul and I discuss the major AWS outage that hit in late October (spoiler: Microsoft had an Azure outage a few days after we recorded, too). We cover Microsoft’s updates to further enable getting rid of the last Exchange Server (and management tools on-premises), and a new long-desired feature coming to Exchange Online archiving. Shifting gear to AI, we discuss improvements on the way across various Copilot features, including a new Excel function for Copilot generation, easier publishing of AI Foundry agents in Copilots, the concept of “Agentic Users” mentioned in the Microsoft 365 roadmap, plus – computer use by the “back door” may be coming to Power Automate.
AWS (and then Azure) Experiences Outages
We recap the widespread AWS outage in late October, which was traced to a latent DNS race condition in AWS’s DynamoDB service. The issue cascaded through AWS’s infrastructure and caused hours of downtime for many popular services. (Ironically, just a week later, Microsoft Azure suffered its own outage due to an inadvertent configuration change in Azure Front Door – proving that cloud hiccups can happen to anyone, AWS or Azure.)
Removing the Last Exchange Server: It Just Got Real
Removing the Last Exchange Server – Microsoft has introduced new capabilities that let Exchange hybrid organizations finally decommission their last on-premises Exchange server:
Cloud-Managed Remote Mailboxes (GA): Admins can now change the source of authority for Exchange attributes of synced user accounts to the cloud. In practice, this means you can manage a user’s Exchange Online mailbox properties directly in Exchange Online even if the user is still Azure AD Connect-synced from on-prem AD. With this feature now generally available, you no longer need an on-premises Exchange just to edit mailbox settings for hybrid users.
Entra ID Group SOA Preview: Similarly, Entra ID (Azure AD) now offers a public preview to convert certain AD-synced distribution groups into cloud-managed groups. This changes the Source of Authority (SOA) for those groups from on-prem AD to Entra ID, allowing you to edit group memberships and properties in the cloud. It enables a phased decommissioning of on-prem AD for exchange-related objects with minimal disruption. Together with cloud-managed mailboxes, this helps organizations retire their on-prem Exchange management servers for good.
And, there’s more: Exchange Updates & Exchange Online Auto-Archiving Improvements
Final Updates for Exchange 2016/2019
Microsoft released what are likely the last scheduled security updates for Exchange Server 2016 and 2019 in October 2025. Exchange 2016 has now exited support, and while Exchange 2019 enters extended support, future updates will be limited. These final patches address known vulnerabilities, and organizations running these versions should apply them if they haven’t already.
Quota-based Auto-Archiving in Exchange Online
Coming in November 2025 (public preview) is a new Auto-Archiving feature for Exchange Online. If a user’s mailbox reaches 95% of its storage quota, the oldest emails will automatically move to that user’s Online Archive until the mailbox is back under 90% full. (Any items tagged “Never Archive” are left alone.) This proactive cleanup should help prevent users from hitting capacity and encountering email send/receive issues. Admins can monitor or configure this feature once it’s enabled in their tenants.
Microsoft 365 Copilot Gets Memory
After previously being announced, Microsoft is rolling out an update that gives Copilot a short-term memory and more personalization. Specifically, Copilot will be able to use your recent chat history to tailor its responses, making it feel more context-aware and user-specific. The roll-out began in late October and should be complete by mid-November 2025. No admin action is required to enable it, but admins will get new controls to manage how Copilot uses (or doesn’t use) chat history for personalization.
From examining what’s kept in it’s memory, it’s relatively compact, and appears to be single-sentence summaries of key information. For example, “Steve is currently deciding what to buy Paul for Christmas” and “Steve has been looking at technology that Paul might like as a present”, rather than the full context.
Other Copilot & AI Enhancements
Excel’s =COPILOT Function
The Excel team is experimenting with a new formula function called =COPILOT(). This function, currently in testing (per the M365 Roadmap), would let you use Copilot-style AI prompts directly in a cell. For instance, =COPILOT(“Summarize this table”) could generate a summary of data in your spreadsheet, or =COPILOT(A1:A20, “categorize”) might categorize a list of items. It essentially brings natural language processing into formulas. It’s an exciting idea, but also raises questions about consistency and performance. We’ll keep an eye on how Microsoft develops this feature.
Retry with AI in Power Automate Desktop
Power Automate for desktop (the RPA tool) is getting a handy AI-assisted feature for error handling. When a UI automation step fails (e.g., it couldn’t find a button to click because the app changed), a new Retry with AI Vision option will use an AI model to guess the intended control and attempt the step again. This can automatically fix some automation issues on the fly by recognizing screen elements more flexibly.
No-Code Publishing for Custom Copilot Agents
Microsoft is previewing a no-code publishing process for Azure AI Foundry agents to the Microsoft 365 Copilot “agent store.” In plain terms, if you develop a custom AI agent (for example, one that connects to a third-party system or a specific knowledge base), you’ll be able to publish it into your Microsoft 365 Copilot environment without complex coding or manual deployment. This lowers the bar for organizations to extend Copilot with their own agents. Expect to see an official announcement and documentation on how admins and developers can package and upload these custom agents through a guided interface, making them available to users in Copilot Chat.
File Upload Support for Custom Agents
Another update for Copilot extensibility: Custom “engine” agents (the ones you build yourself and host) will soon support file uploads from users. Starting in late November 2025, users interacting with a custom agent in Copilot Chat can upload files from their local machine or OneDrive as input (just like the built-in Copilot can accept file uploads). Initially, all file types supported by Copilot (documents, PDFs, etc.) except images will be permitted, with image support likely to follow. This means if you have an agent that analyzes documents or data, users can feed it files directly during a chat, which may be a good thing – but also represent a potential route to data leaving the organization to a third-party AI service.
Agentic Users: AI Coworkers in Teams
Finally, we peek into a fascinating concept Microsoft is working on: Agentic Users. These are essentially AI agents that have a digital identity in your tenant and can operate autonomously as if they were a user. Microsoft describes agentic users as AI-driven entities that can be assigned tasks, engage in collaboration, and even attend meetings or edit documents, all on their own schedule (based on their programming). In the Teams and Copilot ecosystem, tools are emerging to discover, create, and manage these agentic users. Think of them as virtual team members – for example, an “AI Sales Assistant” user that combs through CRM data, answers customer queries in a Teams channel, updates spreadsheets, and joins sales meetings to provide insights, all automatically. No doubt we’ll hear more about this in the coming months.
And that’s all for this episode – so join us in a few time for the next show, where we’ll be joined by a special guest and no-doubt be diving into more AI-related and of course Microsoft 365 news.
