Foundry Hosted vs In-Process vs Copilot Studio Agents (2026 Decision)
A team lead asks the question in a planning meeting and the room splits three ways: do we build this agent in Copilot Studio, write the orchestration ourselves and host it, or hand our container to Foundry and let it run our code? All three are official Microsoft build paths in 2026, all three end up in the same tenant-wide agent inventory, and the wrong pick costs you a rebuild once the project outgrows it. The answer is not "the most powerful one." It is the one whose service model matches who is building the agent, who owns the runtime, and how much pro-code control over orchestration and protocols you actually need. This article is the decision framework for that choice, grounded in Microsoft Learn and current as of mid-2026. Two of these three paths are public preview, so this is a guide to architectural fit and direction, not a production-reliability scorecard. TL;DR Three build paths, picked by service model, not power. Copilot Studio: low-code managed SaaS for makers. GA. Foundry Hosted agents: managed PaaS runtime for your own container. Public preview. Microsoft 365 Agents SDK: pro-code, self-hosted, widest channel reach. Agent Framework orchestrator in public preview. Monday move: before picking a platform, write down four things for this agent - who builds it (maker or pro-dev), who must own the compute, what channels it has to reach, and whether you need custom protocols or background/async behavior. Those four answers pick the path more reliably than a feature checklist. The three paths in one paragraph each Microsoft's own Cloud Adoption Framework frames the build options as three service tiers, which is the cleanest mental model to start from. The CAF positions them as Copilot Studio (SaaS, no/low-code), Microsoft Foundry (PaaS, pro-code or low-code), and GPUs and Containers (IaaS, code-first frameworks for maximum flexibility). The first two are managed by Microsoft. The third is where the self-hosted SDK path lives when you own the compute end to e