I've been using Hotmail for over 10 years. Actually, I should say I've had a registered Hotmail account for over 10 years since it has been relegated to a spam address after I got a Gmail invite in 2004. At the time, Gmail trounced Hotmail in both inbox size and features. Microsoft launched Windows Live Hotmail in 2007 but that was too late to get me to turn back. Hotmail's upcoming update is aiming to add some features that competitors have introduced as well as original new features.
- Conversation view: Similar to Gmail, this is a threaded view for emails so you can track your conversations. With Hotmail you can turn threading off.
- Office integration: Feeling pressure from Google Docs, Hotmail will offer integration with Microsoft Office Live.
- Inbox Sweep: I have over 8000 unread mailing list emails in my Hotmail account. I can unsubscribe from them but it would take me forever to go through all the existing emails and delete the junk. They are mixed in with emails I want so I can't delete everything haphazardly. Gmail has had a feature where you can select every email from a search result so you can delete everything in one click. Hotmail is getting this feature too. Both services have the ability to set up rules for what to do with emails that match a sender. Since Hotmail uses Folders instead of Labels like Gmail, you will be able to segregate your inbox better and hide things you don't feel like looking at all the time.
- Integrated chat/SMS: I wish you could add AIM accounts to the integration but it looks like it will be just Windows Live Messenger accounts.
- Exchange ActiveSync: I currently have my Gmail account, calendar, and contacts pushed to my Windows Mobile phone using Google Sync which integrates with Microsoft ActiveSync on the phone. I'm a little disappointed that it took Microsoft so long to implement this feature since Exchange push has been around forever.
- Full-session SSL: Gmail has had this for a while. A good security feature.
- Unlimited Storage: Hotmail knows most people will never fill up their entire inbox space but what a great selling point to leapfrog Gmail's ever expanding Storage (~7.5GB) by offering unlimited storage.
- Active Views: Embedded YouTube, Hulu, and Justin.tv videos. Instant package tracking. Embedded Flickr and other photo album services. I didn't see any mention of Bing Video integration but hopefully Microsoft didn't forget about their own product.
- 10GB Photo Attachments: This is a little misleading because the pictures are actually not sent with email; they are uploaded to the free Windows Live SkyDrive service. You can send up to 200 photos 50 MB each in a single message. The integration will be seamless for Hotmail users so you can get a link to launch a slideshow or download all the pictures zipped.
- 10GB Office Attachments: Same thing as the photo attachments.
- Single-use security codes: Instead of entering your password on a public computer, all you have to do is click "request a code" and Hotmail will send a single time use password to an alternate email or mobile phone.
- Trusted senders: Hotmail will visually identify verified email addresses from common phishing scam targets like banks.
- There are a bunch of mobile features too but those are for touch phones and I'm still using a non-touch smartphone so nothing really interested me.
Hotmail knows their main competitor is Gmail so they set up a chart specifically comparing the two services. Of course Hotmail is going to show how they are better but it is worth looking at.
A couple features I think Hotmail is still missing are IMAP and personal domain hosting. Exchange integration is a welcome addition but I want to use Hotmail IMAP with other email clients like Thunderbird. I also want to be able to host my custom domain name's email through Hotmail like I do with Gmail currently. Hopefully Hotmail will start rolling out more incremental updates rather than waiting years in between feature enhancements. That said I can't wait to give the new improvements a spin in a few months when the updates are released to the general public.
Here's a video of the new features if you didn't feel like reading: