Just as Google announced that it would be charging for increased space on its Gmail accounts, Microsoft has upped the storage ante with an offering of 4 GB for free Hotmail account users and 10 GB for a paid service ($14.99 annual subscription). This is better than the approximately 2.8 GB that Gmail provides for free, but it falls short of the unlimited storage that Yahoo advertises.

Here is a quick summary of the features you can expect with the new Hotmail:

  • Option to go straight to your inbox, avoiding the “Today” feature on news and stories
  • A link to report on phishing (scam Web site linked to an e-mail)
  • A tool to eliminate duplicate entries from contact list (add multiple e-mail IDs to the same name if you wish)
  • Simpler way to view hyper links and images in mail
  • Support for Hebrew and Arabic
  • Better speed performance

Here’s a list of options that are NOT there but can make Hotmail more appealing:

  • Support for POP3 so that users can access Hotmail accounts through third party e-mail clients (Thunderbird, for example)
  • Assurance that e-mails are not deleted if a user does not log in for a long period of time
  • Removing the feature where free Hotmail account users cannot forward mails to other mail accounts

More news links:

Microsoft increases free email storage limit (PC World)

Hotmail revs Email Space race (Ecommerce Times)

Microsoft gives Windows Live Hotmail a storage boost (InformationWeek)

The point is simple, Gmail won the heart of users with its features and not with its lock-in limitations. Microsoft has to realize that the only way to get people to adopt its services is by doing the logical thing — introduce much wanted, efficient, and innovative services.