From Outlook.com Helps Microsoft Fight Google for the Workplace - The CIO Report - WSJ:

Microsoft’s launch of the Outlook.com email platform, designed to replace Hotmail over a period of time, will help the company fend off Google’s challenge for its business in the enterprise.


This guy's got it. Hotmail's going away as a site only because Microsoft thinks this will be the silver bullet allowing it to change the brand -- they've already tried to make Hotmail into MSN and WindowsLive, neither of which worked. It's not going away because consumers don't like it. It was the Coke of consumer email. It's now the Pepsi, but only barely. It's nowhere close to (ie, lightyears ahead of) Yahoo's Snapple.

The crucial point is that Hotmail for consumers is fine. And Microsoft would love for you home users to keep using the site and clicking the ads. But Gmail is apparently making so much more cash on providing corporate (and university) Gmail "solutions" than advertising that Microsoft would just as well forgo the consumer ad revenue if it means they can sell to the enterprise. So poof, hello comes Outlook.com, adless hotmail with a few social features thrown in.

Here's why it's a long-term winner (where "winner" here only means "better idea than just hotmail.com"):
  1. Anyone who has used Hotmail & Gmail knows Hotmail's interface doesn't just stink0rz, but stink0rz hard relative to Gmail (if nobody was better, you couldn't really complain as loudly).
  2. Outlook.com will be able to sync to Exchange servers like Outlook the client.
Right now that syncing (number 2) is only going to be calendars and contacts, not email, for some reason (perhaps we're still using Hotmail's very mature engine for email and grafted on the Outlook sync?), but you get the point. (And just in case you didn't...)

The two biggest barriers to entry keeping business and other institutions from considering Hotmail for their email solution are gone. Profit.

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