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LibreChat vs. Open WebUI vs. Copilot: Which AI Platform Is Right for Your Business?

Tobias Jonas Tobias Jonas | | 4 min read

Choosing an AI interface platform is one of the most fundamental strategic decisions a company makes today. It defines the boundaries of innovation, costs, and data sovereignty for years to come. In this demanding market, three fundamentally different approaches compete: the agile open-source favorite Open WebUI, the flexible open-source hub LibreChat, and Copilot M365, deeply anchored in the Microsoft ecosystem.

This analysis goes beyond a simple feature comparison. We evaluate the architectures, ecosystem capabilities, and Total Cost of Ownership (TCO) to create a well-founded, strategic decision basis for your company.

Architectures in Direct Comparison

CriterionOpen WebUILibreChatMicrosoft Copilot (for M365)
Basic ArchitectureLightweight frontend for local LLMsFlexible multi-provider platformAI service integrated into M365
Cost ModelOpen Source (only infrastructure costs and tokens)Open Source (only infrastructure costs and tokens)High license costs (approx. €30 / user / month)
AI Model ConnectionPrimarily Ollama; limited API supportComprehensive (Azure OpenAI, Gemini, Anthropic Claude, Perplexity, etc.)Proprietary Microsoft ecosystem
Agent FrameworkNoYes, via n8n/external automation toolsYes, Copilot Studio (paid Power Platform license)
User-defined AgentsNoYes, via text prompt as “Preset”Limited through predefined “Skills”
Data IntegrationNoYes, via REST APIs & WebhooksYes, via Microsoft Graph & Connectors
Data SovereigntyMaximum (On-Premise / own cloud)Maximum (On-Premise / own cloud)Limited (processing in Microsoft Cloud)
AuthenticationBasic LoginEnterprise-Grade (SSO via Azure AD, Keycloak, etc.)Enterprise-Grade (M365 Identity)

Strategic Analysis: Flexibility vs. “Walled Garden”

The decisive differences lie not on the surface but in the underlying philosophy of the platforms.

1. Agent Capability: The Ecosystem Is Decisive

The future of AI in business lies in autonomous agents that execute complex, multi-step tasks. Microsoft offers Copilot Studio, a low-code environment for this purpose. While powerful, it creates a double lock-in: It binds you not only to the Microsoft model but also to the Power Platform ecosystem with its own complex licensing models.

LibreChat pursues an open but no less powerful approach. Through its native REST APIs and webhooks, it can be seamlessly connected to leading open-source automation platforms like n8n. This combination enables the construction of AI agents that are in no way inferior to Copilot Studio in functionality. The crucial difference: You retain full control, avoid license costs, and can integrate any technology you choose.

2. User-Defined Agents: Democratization of AI

LibreChat allows any user to configure simple but effective agents by creating “Presets.” A preset defines the AI model to be used and a specific system instruction. This way, an employee without technical knowledge can create an “Agent for summarizing meeting minutes” or an “Agent for creating social media texts” via simple text prompt and share it with the team.

3. Total Cost of Ownership (TCO): The License Cost Trap

With Copilot for M365, the license costs of approximately €360 per user per year are just the tip of the iceberg. Add to that the costs for Copilot Studio to build full-fledged agents. With an open-source solution like LibreChat, these license costs are completely eliminated. The only costs incurred are for the underlying cloud infrastructure, which often amounts to just a fraction.

Recommendation: The Right Platform for the Right Purpose

  • Open WebUI: The first choice for developers and researchers. Ideal for quick, local experiments and operating individual models with a focus on simplicity. It’s an excellent tool but not a strategic enterprise platform.
  • Microsoft Copilot: The path of least resistance for companies deeply rooted in the Microsoft ecosystem and willing to pay a significant premium for seamless integration while giving up strategic flexibility.
  • LibreChat: The strategically superior choice for companies that see AI as a sovereign, flexible, and central building block of their IT architecture. It offers freedom in choosing the AI model, an open framework for building powerful agents, and an unbeatable cost structure.

From Platform to AI Solution: CompanyGPT

The decision for the open ecosystem of LibreChat is the strategically smartest. However, implementing and securely operating such a solution requires enterprise-level expertise.

This is exactly where innFactory CompanyGPT comes in. We offer not just hosting but a fully integrated and managed AI platform based on LibreChat.

Our Service Promise:

  • Sovereign Operation: We implement and operate the entire platform on your own Azure infrastructure. Your data never leaves your control.
  • Full Integration: We connect the platform via SSO to your Azure AD and support you in connecting your enterprise data and building agent workflows with n8n.
  • Worry-Free Service: Through our DevOps expertise, we guarantee the highest security, scalability, and permanently up-to-date software.
  • Cost Efficiency: Avoid expensive license models and make optimal use of your existing resources.

Make a decision for technological sovereignty and economic prudence. Contact us for strategic consulting on how you can achieve your goals faster, more securely, and more cost-effectively with an open AI platform.

Tobias Jonas
Written by

Tobias Jonas

Co-CEO, M.Sc.

Tobias Jonas, M.Sc. ist Mitgründer und Co-CEO der innFactory AI Consulting GmbH. Er ist ein führender Innovator im Bereich Künstliche Intelligenz und Cloud Computing. Als Co-Founder der innFactory GmbH hat er hunderte KI- und Cloud-Projekte erfolgreich geleitet und das Unternehmen als wichtigen Akteur im deutschen IT-Sektor etabliert. Dabei ist Tobias immer am Puls der Zeit: Er erkannte früh das Potenzial von KI Agenten und veranstaltete dazu eines der ersten Meetups in Deutschland. Zudem wies er bereits im ersten Monat nach Veröffentlichung auf das MCP Protokoll hin und informierte seine Follower am Gründungstag über die Agentic AI Foundation. Neben seinen Geschäftsführerrollen engagiert sich Tobias Jonas in verschiedenen Fach- und Wirtschaftsverbänden, darunter der KI Bundesverband und der Digitalausschuss der IHK München und Oberbayern, und leitet praxisorientierte KI- und Cloudprojekte an der Technischen Hochschule Rosenheim. Als Keynote Speaker teilt er seine Expertise zu KI und vermittelt komplexe technologische Konzepte verständlich.

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