Microsoft just announced the next version of Hotmail, which will bring a large number of new features to the world’s most popular email service. Hotmail’s 360 million users will soon get enhanced security features, a Gmail-like conversation view, automatic filters for status updates from social networks, integration with the new Microsoft Office Web Apps and numerous other new features that are meant to make using Hotmail safer and reduce the amount of clutter in Hotmail users’ inboxes.
Email has Changed
As Walter Harp, Microsoft’s director of product management with Windows Live, told us earlier today, this redesign of Hotmail evolved as Microsoft started to think about how email has changed over the last few years. According to Harp, the last major revolution in email was the arrival of Gmail in 2004. Since then, however, the way people use email has changed. Social network updates from sites like Facebook and LinkedIn now make up somewhere between 15 to 30% of all mail in Hotmail users’ inboxes. In addition, email users now send out billions of photos and documents. Microsoft alone stores over 15 billion office documents on Hotmail and its users send out close to 1.5 billion photos every month.
Bigger Attachments – Integration with Office Web Apps
Today’s update tackles these changes head-on. Hotmail users will now, for example, be able to send up to 10 GB of photos and documents in a single message. Instead of sending these messages as attachments, however, Hotmail will simply route these files to the sender’s Windows Live SkyDrive account (Microsoft’s free online storage service), where the recipients can access them through a link. Thanks to the new Office Web Apps, recipients will also be able to see and edit Office documents right in the browser.
Less Clutter in Your Mailbox
In order to make it easier for users to wade through lots of social network status updates and unclutter their Hotmail inbox, Microsoft is introducing a new feature called “1-click filters.” These filters will allow users to just see messages from services like Facebook and shipping updates from the USPS.
Other new features that will help to keep Hotmail users’ inboxes organized include a new Gmail-like conversations view (which will be an opt-in feature and turned off by default), as well as the ability to quickly see all the emails from a given sender while reading an email from this sender. Hotmail users will also be able to just see all the new emails that contain photos.
Microsoft has also partnered with a number of third-party services, including Hulu, YouTube, JustinTV, the USPS, SmugMug and Flickr to provide additional functionality through a feature called “active views.” This allows Microsoft to integrate some of the functionality of these sites directly into the emails.
Other new features include Exchange ActiveSync push email for Hotmail – which means that you can now push Hotmail email and data from your Windows Live Calendar directly to the iPhone, for example – as well as a unified contact list for all Windows Live services and third-party services like Facebook and MySpace.
On the security front, Microsoft is introducing full-session SSL encryption for all accounts and a feature that will identify and highlight trusted senders (like known banks and online stores) in order to prevent phishing scams. Microsoft has also managed to bring down the average number of spam emails in its users’ inboxes to only 4% (down from 35% in 2006).
Another nifty new security feature is the introduction of a single-use code that allows users to log in from a public computer at an airport or coffee shop without having to fear that their passwords could be stolen. Users will receive these codes by SMS or through an alternate email account.
Microsoft Wants to be #1 in the U.S.
As Walter Harp pointed out when we talked to him today, Hotmail is the #1 email service in the world, but in the U.S., it is currently only the second-most used service after Yahoo Mail. With this new version of Hotmail, Microsoft hopes to be able to close this gap. Email, of course, tends to be a very sticky service and users aren’t likely to abandon Yahoo for Hotmail anytime soon. Thanks to today’s updates, however, chances are that many new users will choose Hotmail over Yahoo.
In terms of functionality, however, the real competition for Hotmail isn’t Yahoo but Google. Google, after all, also offers integration with its online office suite and photo service. Unlike Google, however, Microsoft doesn’t plan to offer a small business version of Hotmail and prefers to steer people towards Microsoft Exchange and Outlook instead. Microsoft’s services – and especially the Office Web Apps – are competitive with Google’s services (and, in many respects, better). Thanks to the integration with SkyDrive and Office Web Apps, Hotmail now presents a very viable alternative to Gmail and it will be interesting to see if Microsoft will be able to capitalize on this.