Microsoft released its 2025 Annual Work Trend Index this week.
The report claims this is the year companies will move beyond AI experiments and rebuild their core operations around AI.
Microsoft also introduced several new terms that it believes will shape the future of the workplace.
Let’s look at what Microsoft wants to add to your work vocabulary. Remember, Microsoft has invested heavily in AI, so they have good reasons to make these concepts seem normal.
The Microsoft AI Dictionary
1. The “Frontier Firm”
Microsoft says “Frontier Firms” are organizations built around on-demand AI, human-agent teams, and employees who act as “agent bosses.”
The report claims 71% of workers at these AI-forward companies say their organizations are thriving. That’s much higher than the global average of just 37%.
2. “Intelligence on Tap”
This refers to AI that’s easily accessible whenever needed. Microsoft calls it “abundant, affordable, and scalable on-demand.”
The company suggests AI is now a resource that isn’t limited by staff size or expertise but can be purchased and used as needed, conveniently through Microsoft’s products.
3. “The Capacity Gap”
This term refers to the growing disparity between what businesses require and what humans can provide.
Microsoft’s research indicates that 53% of leaders believe productivity must increase, while 80% of workers report a lack of time or energy to complete their work. They suggest that AI tools can fill this gap.
4. “Work Charts”
Forget traditional org charts. Microsoft envisions more flexible “Work Charts” that adapt to business needs by leveraging both human workers and AI.
These structures focus on results rather than rigid hierarchies. They allow companies to use the best mix of human and AI workers for each task.
5. “Human-Agent Ratio”
This term refers to the balance between AI agents and human workers required for optimal results.
Microsoft suggests that leaders need to determine the number of AI agents required for specific roles and the number of humans who should guide those agents. This essentially redefines how companies staff their teams.
6. “Agent Boss”
Perhaps the most interesting term is that of an “agent boss,” someone who builds, assigns tasks to, and manages AI agents to boost their impact and advance their career.
Microsoft predicts that within five years, teams will be training (41%) and managing (36%) AI agents as a regular part of their jobs.
7. “Digital Labor”
This is Microsoft’s preferred term for AI-powered work automation. Microsoft positions AI not as a replacement for humans, but as an addition to the workforce.
The report states that 82% of leaders plan to use digital labor to expand their workforce within the next year and a half.
However, this shift towards AI-powered work automation raises important questions about job displacement, the need for retraining, and the ethical use of AI.
These considerations are crucial as we navigate this new era of work.
Behind the Terminology
These terms reveal Microsoft’s vision for embedding AI deeper into workplace operations, with its products leading the way.
The company also announced updates to Microsoft 365 Copilot, including:
New Researcher and Analyst agents
An AI image generator
Copilot Notebooks
Enhanced search functions
Jared Spataro, Microsoft’s CMO of AI at Work, states in the report:
“2025 will be remembered as the year the Frontier Firm was born — the moment companies moved beyond experimenting with AI and began rebuilding around it.”
Looking Ahead
While Microsoft’s terms may or may not stick, the trends it describes are already changing digital marketing.
Whether you embrace the title “agent boss” or not, knowing how to use AI tools while maintaining human creativity will likely become essential in the changing marketing workforce.
Will Microsoft’s vision of “Frontier Firms” happen exactly as they describe? Time and the number of people who adopt these ideas will tell.
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