Outlook users have only just got over the webification of Microsoft’s email client in recent years, and already there are major changes on the horizon. Sources familiar with Microsoft’s plans tell me that the company recently reorganized its Outlook team under new leadership with a focus on rebuilding the email client for the AI era.
“Instead of bolting AI onto legacy experiences, we have the chance to reimagine Outlook from the ground up,” Gaurav Sareen, corporate vice president of global experiences and platform at Microsoft, writes in an internal memo seen by Notepad.
Sareen is now taking over direct leadership of the Outlook team from Lynn Ayres, who is taking a sabbatical from Microsoft. He lays out a somewhat unclear vision of how Microsoft is going to transform its email client into more of an assistant, in a way that sounds very much like what Copilot already aspires to be.
“Think of Outlook as your body double, there for you, so work feels less overwhelming and more doable because you are not facing it alone,” Sareen writes in his memo. “With Copilot, this body double becomes even more powerful. Copilot turns Outlook from a set of tools into a partner that acts.”
Sareen envisions a future version of Outlook where the email client reads your messages, drafts replies, and organizes all of your time. That type of overhaul will require some changes to the way the Outlook team is organized and a renewed focus on shipping even faster. Sareen is expecting weekly feature experiments, rather than quarterly ones, and “prototyping and testing in days, not months.”
This also means that AI will be embedded in how Microsoft designs Outlook, builds it, and then ships it to consumers and businesses. “AI will not just be in our product, it will define our culture, helping us move at the speed this moment demands,” Sareen says.
The pressure is now on the Outlook team to build and deliver some type of AI overhaul to an email client that’s used by millions. Microsoft’s last major revamp to Outlook started a few years ago, with a web-based “One Outlook” email client that’s replacing its Windows, Mac, and web versions of Outlook. Microsoft has struggled to perfect it in recent years and bring it up to the standard of the existing desktop apps it’s trying to replace.
Sareen now wants Outlook employees to find “courage” to “let go of old ways of working” and “step forward when the easier path is to wait.” One Outlook was a big challenge for Microsoft, and attempting to transform an email client that Microsoft’s most important customers count on with unproven AI features is going to be an even bigger task. Executives at businesses around the world rely on their Outlook calendar every day, and Microsoft will have to tread carefully with AI features that could upend an important work tool.
The upcoming changes to Outlook are part of ongoing reorgs across Microsoft that are almost always about AI. Microsoft’s LinkedIn CEO, Ryan Roslansky, took on an expanded role as its head of Office earlier this year in an AI shake-up. Sareen reports to Roslansky, who leads all of the Office, Outlook, and the Microsoft 365 Copilot app teams.
The challenge for both Roslansky and Sareen is to convince Microsoft’s own employees that rebuilding Outlook for AI is the right thing to do. I’ve spoken to plenty of Microsoft employees who are unconvinced by Microsoft’s AI efforts and the investments being made. That’s not stopping Microsoft’s Outlook leadership from dreaming big, though.
“Next year, every product will claim to be AI native,” Sareen writes. “But there will be teams that just slap AI on products and make buzzword complaint claims. And there will be teams that will have actually rebuilt their product and culture from the ground up to make that real. I am betting my leadership that we will be that team.”
- These are the Office icons Microsoft rejected. Microsoft is busy rolling out new curvy and colorful Office icons, and now it’s also taken the time to reveal the experiments that didn’t make the cut. Some of the concepts are radically different from what Microsoft is shipping, with design explorations for Word, Excel, and PowerPoint that more closely resemble the Office for Mac icons of the past. I personally love the X icon experiment for Excel, but I’m still impressed with the end result of Microsoft’s new Office icons.
- Microsoft is reportedly moving its Surface manufacturing out of China. As trade tensions grow between the US and China, Microsoft is reportedly preparing to move the manufacturing of its Surface laptops and tablets out of China. The move would help with pricing for future Surface hardware and server products, and Microsoft is also reportedly pushing to produce more Xbox consoles outside of China.
- Xbox Ally and Ally X review: this is not an Xbox. Microsoft’s first “Xbox” handhelds are shipping not fully baked. I’ve been testing both devices over the past couple of weeks, and they feel like a beta for Microsoft’s big ambitions to combine Xbox and Windows. Right now, the Xbox full-screen experience is a good first step, but it also feels like just the Xbox app running on Windows. As soon as you need to launch a Steam game or apply system updates, you’re thrown into a world of Windows that is far from ready for a device like this. I’d still like to see Microsoft bring all of the key Xbox OS features over to this handheld and really make Windows disappear as much as it can.
- Windows 11 can now automatically switch between light and dark modes, thanks to a PowerToy. While you’ll need a Microsoft PowerToy to do it, you can now automatically switch between light and dark modes on Windows 11 based on a schedule or when the sun rises and sets. The latest Light Switch PowerToy is very similar to the Auto Dark Mode app that’s been around for years, and you can also use it to set whether the shell, apps, or both should switch automatically.
- Microsoft wants you to talk to your PC and let AI control it. Microsoft might not be ready to announce Windows 12 just yet, but it clearly wants to turn every Windows 11 PC into an AI PC that Copilot controls and users talk to. Last week, the company launched Copilot Vision and Copilot Voice capabilities for all Windows 11 PCs, in an effort to convince people to talk to their PC and let AI control it. There’s a flashy ad campaign to go with this latest effort, but I can’t say I’m convinced it’ll do much to improve the usage of Copilot or get people talking. Microsoft has tried and failed to get people to talk to their PCs with Cortana, and although Copilot is a lot more capable, people still pick ChatGPT instead. OpenAI is arguably Microsoft’s biggest partner and its biggest competitor for what comes next.
- Microsoft’s emergency Windows 11 update fixes a nasty system recovery bug. Microsoft is now rolling out an out-of-band fix for Windows 11 to address a major bug the company introduced with its latest monthly Windows 11 update. The original update, released on October 14th, accidentally broke the Windows Recovery Environment (WinRE), leaving people unable to use a USB mouse or keyboard to recover their PCs or factory reset them. That’s a pretty major issue if you can’t recover your PC properly, so Microsoft rushed out a fix in less than a week. This is the second time in a matter of months that Microsoft has had to issue an emergency patch for a buggy Windows 11 update.
- Anthropic connects Claude to Microsoft Teams, Outlook, and OneDrive. Anthropic and Microsoft are increasingly cozying up for AI models and services. Anthropic is integrating its Claude AI assistant with Microsoft 365 services so it can surface content from Word documents, Teams messages, and Outlook emails in conversations with the chatbot. The integration comes just weeks after Microsoft leaned on Anthropic AI models to improve its own Microsoft 365 apps. Anthropic’s models are also powering a new Office Agent that is able to produce Word and PowerPoint documents.
- Even Xbox developer kits are getting a big price hike. After raising prices on Xbox consoles and subscriptions, Microsoft is now hiking the price of its Xbox Development Kit (XDK). The current Xbox dev kit is moving from $1,500 to $2,000, a 33 percent jump in price. That’s a percentage that closely matches the Trump administration’s 30 percent tariff on imports from China. Microsoft blames “macroeconomic developments” for the dev kit price changes, but it’s hard to just blame the Trump tariffs when prices for Microsoft’s Xbox dev kits are going up worldwide. While independent developers that want to self-publish their games can apply for ID@Xbox and get free dev kits, the price hikes for everyone else come just as Microsoft is readying its next-gen Xbox hardware.
- Hallmark’s glowing Xbox 360 ornament plays the Halo theme. It’s nearly Halloween, which means it’s also nearly Christmas time. Hallmark is marking the occasion with a new Xbox 360 Keepsake ornament that incorporates elements of the Halo theme. I’ve ordered one for my tree, but I’m disappointed that there isn’t a secret Easter egg where it does a red ring of death.
- Tune in for some Halo news today. Speaking of Halo, it’s the Halo World Championship this weekend, and Halo Studios has been teasing an announcement of its latest Halo project later today. There are plenty of journalists and content creators in Seattle at Halo Studios, so expect some big news during the 1PM PT / 4PM ET section of the stream. It’s also been more than a year since I exclusively revealed some form of Halo CE remaster was on the way for PS5 and Xbox. Time flies.
- Did Microsoft just tease that the next Xbox is a PC and console? We already know that the next-gen Xbox console isn’t locked to a single store, will use an AMD chip inside, and will maintain compatibility with an existing library of Xbox games. Now, Microsoft appears to be teasing that the next-gen Xbox will be some type of hybrid console and PC. Xbox president Sarah Bond dropped some vague hints about Microsoft’s next-gen Xbox console this week, telling Mashable that it’s “going to be a very premium, very high-end curated experience.” It’s also linked to Microsoft’s Windows and Xbox work, as “you’re starting to see some of the thinking we have in this handheld,” according to Bond. I’m more convinced than ever that Windows will form the foundation for the next-gen Xbox devices, but Microsoft will have to do a much better job than the Xbox Ally handhelds if it wants to convince Xbox owners to upgrade.
- Microsoft’s lofty goals for Xbox profit are behind the price hikes and studio shutdowns. The news that Microsoft’s Activision Blizzard acquisition has put huge pressure on Xbox to deliver improved profit margins won’t come as a surprise for regular Notepad readers. I wrote earlier this month that Microsoft is trying to find more ways to make money with Xbox, and it’s hiking prices all over the place as a result. Now, Bloomberg reports that Microsoft CFO Amy Hood set across-the-board targets of 30 percent profit margins in fall 2023. It’s a staggering target that I didn’t think was real when I first heard about it last year. While Microsoft wastes money trying to convince consumers to switch from ChatGPT to Copilot, the Xbox margins are putting real pressure on one of Microsoft’s last successful consumer products.
- Meet Mico, Microsoft’s AI version of Clippy. After testing a bouncing blob for its Copilot Voice mode in recent months, Microsoft is now rolling this character out as Mico today. It’s a virtual character, much like Clippy, that responds with real-time expressions when you talk to it. It’s part of Microsoft’s broader effort to get people talking to their PCs, tablets, and phones, and all designed to give Copilot an identity. I’m sure we’ll be seeing plenty of Mico in ads for Copilot soon.
- Copilot is getting more personality with a ‘real talk’ mode and group chats. Mico isn’t the only new addition to Copilot this week. Microsoft is also giving the AI assistant more personality with a “real talk” mode, group chats, and better memory support. Copilot Groups is designed for groups of friends, classmates, and even teammates to use Copilot in a single session. “Real talk” reminds me of the early days of the sassy Sydney responses from the Bing chatbot that became Copilot, and the memory features now let you see what Copilot learns about you.
- OpenAI and Microsoft enter the AI browser wars. In the same week OpenAI launched its new ChatGPT Atlas browser, Microsoft officially launched its Copilot Mode in Edge. Both of these browsers are based on Chromium, and they’re both trying to do similar agentic things to get people hooked on relying on AI answers instead of navigating to Google or using Gemini. This feels like a real battleground over the future of the web, but I think both Microsoft and OpenAI have a long way to go to convince consumers to ditch Chrome.
The Microsoft news train hasn’t stopped over the past week, but I’m about to take some time off. Notepad will return in three weeks’ time, just before Microsoft’s big Ignite conference.
I’m always keen to hear from readers, so please drop a comment here, or you can reach me at [email protected] if you want to discuss anything else. If you’ve heard about any of Microsoft’s secret projects, you can reach me via email at [email protected] or speak to me confidentially on the Signal messaging app, where I’m tomwarren.01. I’m also tomwarren on Telegram, if you’d prefer to chat there.
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