What happened
On Sept 30, 2026 Microsoft shipped Agent 365 updates: Tools management is now GA across MCP servers, plugins, skills and connectors (tenant-wide allow/block from one pane); AI mode (public preview) adds natural-language registry discovery; Agent Management Rules (public preview) automate blocking/rejecting/policy actions; custom MCP servers can be registered via CLI for admin approval; and cost management extends to Code and Copilot Managed Runtime with model/effort spending policies.
Why it matters
Agent 365 is consolidating agent governance (registry, tools, runtimes, cost) into one control plane at a scale no peer vendor matches, directly closing the shadow-tools/MCP risk the market is racing to solve. GA tool governance and the custom-MCP approval path give IT a practical enforcement framework that most competing offerings still only preview.
Applicability
Microsoft 365/Entra customers running or planning Agent 365 should adopt GA Tools management and GA/PR cost controls immediately to govern MCP servers, plugins and skills, and pilot Agent Management Rules and AI mode to operationalize registry hygiene.