Microsoft now has a big-time Gmail competitor. Before you chuckle and say "that only took eight years," keep in mind that Gmail is largely the same product that Google launched in 2004 -- with some nice incremental tweaks to improve the user interface.
Microsoft wants to inject some innovation into webmail again -- and it looks like they may have pulled it off. On Tuesday, the company unveiled Outlook.com, which is both its successor to Hotmail as well as its enhanced webmail for individual business professionals. It draws on Hotmail, Microsoft Exchange, and the Metro UI from Windows Phone 7 and Windows 8.
Based on my look at the working preview of Outlook.com that Microsoft has already released into the wild as well as an interview with one of Microsoft's product leads on Outlook.com, I think there are four reasons why some users -- especially professionals -- will be legitimately tempted to make the switch from Gmail.
1. Automatic folders
The best new innovation in Outlook.com is what I like to call its "automatic folders" feature. The system attempts to smartly sort some of your mail for you by automatically creating virtual folders for common stuff like email newsletters, Facebook and Twitter alerts, and other repetitive messages that can end up burying more important emails from human beings you actually need to correspond with. Obviously, since this is run by an algorithm, there will certainly be some false positives and negatives and you might have to tweak it, but I like the low-touch nature of this feature. Microsoft has also tried to streamline the process of setting up your own inbox rules as well in Outlook.com.
In his blog post about the new service, Microsoft's Chris Jones summed up the feature. "Outlook.com automatically sorts your messages from contacts, newsletters, shipping updates, and social updates," wrote Jones, "and with our Sweep features you can move, delete and set up powerful rules in a few, simple clicks so you can more quickly get to the email you really want."
Another mail management feature that I like in Outlook.com is that you can hover over a message and get a set of actions to delete the message or flag it as important or sort it to a folder -- and you can even customize the functions you want to see on the hover-over.
2. Mobile experience
The biggest benefit that Microsoft has in designing a new webmail service in 2012 is that it can optimize it for today's intensely-mobile world.
"The way people do mail on their mobile phone tends to be a little different," said Brian Hall, General Manager of Windows Live and Internet Explorer. "They don't do as much mail management."
With that in mind, Microsoft used the automatic folder feature as its way of helping organize and prioritize users' inboxes in a way that can work in virtually any type of desktop or mobile email client.
"Most people on a phone or tablet use the native mail client," said Hall. "In those instances you want to make sure you work with any inbox. It's a different approach than Priority Inbox from Google because they have to go create clients for mobile or else it breaks Priority Inbox."
Hall also stressed that Microsoft is focused on delivering an excellent mobile web experience. In fact, the company is so focused on the native client and mobile web experience of Outlook.com that it doesn't currently have plans to build an app for Microsoft's own Windows Phone 7. "It works beautifully with the native client," said Hall.
On the other hand, he said they are working on an Android app, because "Android devices are less likely to have an Exchange ActiveSync client."
3. Privacy protection
One of the creepiest parts of Gmail has always been the fact that it does text-mining on your emails and uses that information to surface targeted ads. That's the price you pay for unlimited storage and a free service. For example, if you're emailing back-and-forth with a family member about a trip to go hiking, Gmail will simultaneously surface text ads for things like Rocky Mountain vacations, hiking boots, and protein bars. While these ads are generally unobtrusive and occasionally even useful, it still freaks out some people to realize that Google is essentially "reading their mail." This is especially true for business professionals and others who use email to transmit potentially valuable or sensitive information.
Capitalizing on this uneasiness, Microsoft is promising that Outlook.com will not do text-mining on your inbox, while still offering its service for free and with "virtually unlimited storage."
"We don't scan your email content or attachments and sell this information to advertisers or any other company, and we don't show ads in personal conversations," Jones stated.
That doesn't mean Outlook.com won't have ads. There are right-column ads on the main inbox screen, but there aren't ads on individual messages. Also, I'm sure these ads are going to be targeted based on what Microsoft knows about you in general, just not on the content of your individual messages.
4. Social integration
One of my favorite plug-ins for Gmail is Rapportive, which fills the right column in Gmail with contact information about the person you're emailing. It draws that information from LinkedIn, Twitter, and Facebook (once you've logged in to those services) and will even show you the LinkedIn job title and latest status updates from the contact you're emailing.
Microsoft has taken this kind of functionality and built it directly into Outlook.com, filling the right column of its message screen with this same kind of social contact data, but displaying it in a little bit simpler, cleaner way that follows the Metro UI style. Outlook.com doesn't appear to show quite as much data as Rapportive.
However, Microsoft has taken social integration a step further. You can not only view people in your social networks from within Outlook.com and see their latest updates, but from the "People hub" you can also respond to status updates on Twitter and write on someone's Facebook wall, all directly from Outlook.com. You can also do Facebook chat within Outlook.com. The instant messaging functionality itself is another strong feature of Outlook.com. The implementation is certainly better integrated and more usable than GTalk in Gmail.
Hall said Microsoft was focused on several key priorities in Outlook.com: "Clean UI, design for tablets and all devices, connected with the services you actually use (Twitter, Facebook, LinkedIn), works great with [Microsoft] Office and SkyDrive, and actually prioritizes your privacy."
Before I took a look at Outlook.com, I couldn't imagine that there was much Microsoft could do to innovate in webmail, and I expected it to feel like a desperate late attempt to make Hotmail relevant by copying Gmail. While Outlook.com is definitely aimed squarely at Gmail, I was surprised at how fresh it feels. There's some really useful innovation in there, and I think it's really smart for Microsoft to go after Google on privacy. It means Outlook.com won't be nearly as powerful of a money-maker as Gmail, but it could build some needed goodwill from users.
I also like that Microsoft isn't afraid to admit that this is aimed directly at stealing some of Gmail's thunder. Hall said, "If you're a heavy Google Docs or a Google+ user, then Gmail is probably for you. Otherwise, if you use Facebook, Twitter, LinkedIn, and Office, then Outlook [dot com] is better."
That's an ambitious claim. And it may just have some legs.
For more details on Outlook.com, see Kent German's deep dive over on CNET. Also, check out Mark Kaelin's first look at Outlook.com in his TechRepublic gallery.
Jason Hiner is the Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He is an award-winning journalist who writes about the people, products, and ideas that are revolutionizing the ways we live and work in the 21st century.