Out with Hotmail… In with Outlook!

So what does this mean for marketers?

Microsoft recently announced that it is replacing its ancient service Hotmail.com with Outlook.com to catch up with competitors, in particular Google. Within a few hours, 1 million users had already signed up or migrated to this service.

Microsoft is positioning Outlook.com as a new free mail service that pulls features from Hotmail and Exchange. It is designed for personal use. Microsoft continues to position Outlook as its business email client. Currently Hotmail users are not required to move to Outlook.com, but in long-term they might be migrated to Outlook.com.

The new service can be combined with social networks like Twitter, Facebook and LinkedIn. Additionally Microsoft promises, at some point in the future, to launch Skype video calls from inside Outlook.com inboxes.

Furthermore with Outlook.com, Microsoft offers online versions of its Office programs Word, Excel and PowerPoint. Documents sent by email can be viewed and edited directly and  data can be stored directly into Microsoft’s Skydrive – an online storage.

Summary of our observations so far:

• MS email client and the webmail has the same name = Outlook
• Outlook replaces Hotmail (users can migrate from Hotmail to Outlook.com – email address remains ‘Hotmail’)
• Functionality is similar for the client and for the Web version
• MS created a new interface and made the UI a bit more intuitive
• Webmail version supports people who are using smartphones
• Microsoft is planning to release Windows 8. The new Outlook.com UI could be an introduction to users

Windows 8 screenshot:

• Microsoft emphasises that they don’t scan consumers email content or attachments and sell this information to advertisers or any other company, and that they don’t show ads in personal conversations.
• There is no advertising for German and French versions for example, but available for the US version
• They promote their industry leading spam protection, and rock solid account protection powered by your Microsoft account. But there is no information on who will be in the junk folder.

• Currently there are no changes or distinctive observation related to rendering

Marketers should consider the following:

• Picture shown in the email can be pulled from social networks
• New domain in the market (Outlook.com is a new domain, Hotmail may disappear – it is not clear when and if definitely)
• Outlook.com categorises contact mails and newsletter mails, and enables users to add the address to the contact list. Newsletter email address can’t be added to the contacts directly. See screenshots below.

So why did Microsoft decide to launch Outlook.com?

• To compete with Google
• Trends that Microsoft observed:
  • 50% of the email in a typical inbox is newsletters and another 20% is social network updates à inboxes are overloaded, email is becoming less and less useful
  • People increasingly keep up their personal connections in social networks instead of their email address books.
  • Email use among people who use social networks actively has continued to increase.
  • Email represents 20% of the time we spend on smartphones, and is used extensively on tablets as well as PCs.