New Management Wants to Reimagine Outlook but That Doesn’t Mean That the New Outlook Client is Dead

A Tom Warren report in TheVerge.com that Outlook is getting an AI overhaul under new leadership (reported here in an accessible form) certainly caused the imagination of some commentators to go into overdrive. Unfortunately, the conclusions reached are impractical and unlikely. Let me explain why.

The article reported that Gaurav Sareen, corporate VP of global experiences and platform at Microsoft wants the Outlook developers to reimagine how Outlook can serve users by using AI to process email in a much more proactive manner than happens today.

Essentially, Outlook should be like a hyper-efficient assistant that processes email to relieve mailbox owners of the need to review and decide how to handle messages. According to the internal memo seen by Warren, Sareen wants developers to take a new approach: “Instead of bolting AI onto legacy experiences, we have the chance to reimagine Outlook from the ground up.” More importantly, Sareen wants work to happen faster with teams “prototyping and testing in days, not months.”

Senior managers have a habit of laying out grand plans when they take over new responsibilities. That’s OK, because it’s important to have a vision for where a product or technology is heading, so no one can criticize Microsoft executives for setting out how they think development teams should react to the current state of the market and customer demand.

However, Outlook is in the middle of a transition to fulfil the “One Outlook” vision of clients that deliver the same functionality on Windows, Mac, browsers, and mobile clients. The transition from Outlook classic is ongoing, and while I have been critical of the rate of progress and the implementation of some features (like the very slow export to PST), there’s no doubt that Microsoft is making progress. The eventual goal is to be able to transition away from Outlook classic by the time support for the classic client finishes in 2029.

The need to deliver certainty to corporate customers means that it makes zero sense for commentators to conclude that Microsoft will now dump the new Outlook in favor of some AI-infused client that must be designed from the ground up to replace Outlook classic, OWA, Outlook mobile, and the new Outlook.

Microsoft’s Outlook Commitment to Microsoft 365 Customers

Microsoft has a commitment to Microsoft 365 customers to deliver a solid version of Outlook as part of the Microsoft 365 enterprise apps suite. Changing course now to incorporate new AI-powered functionality might sound exciting, but it ignores the simple fact that Microsoft 365 Copilot licenses are not possessed by many tenants, and without Copilot and access to AI-powered features, the vision outlined by Sareen cannot be achieved.

I don’t think Microsoft is willing to give away Copilot licenses just to enable AI features in Outlook. That move wouldn’t go down well with shareholders who look at the massive investments made to build out datacenter capabilities for AI without a clear line of sight about how these investments will deliver revenues.

Microsoft is coy about many Microsoft 365 Copilot licenses they’ve sold. No one knows how many Microsoft 365 Copilot licenses are in active use, but I’m willing to bet that the number of Copilot licensees is hundreds of millions removed from the number of Outlook users. The latest data from the Microsoft FY26 Q1 results indicate that Microsoft 365 has around 446 million paid seats. Let’s say that 400 million of these people use Outlook. That’s a lot of additional AI processing that might be required to deliver a new AI-infused Outlook client, which is why I think that any strategy based on dramatically increasing the amount of AI processing in Outlook will run into the cold brick wall of financial reality.

There’s also the need for Microsoft to deliver a client Exchange Server after Outlook classic retires. This client is unlikely to have as many AI-powered features because it’s much harder to deliver those features in on-premises environments than it is in the cloud.

Evolutionary AI Additions to Outlook

What I think will happen is that Microsoft will continue to press ahead with its One Outlook strategy to equip the new Outlook with equivalent functionality (and more) than is currently available in Outlook classic. It just makes sense for Microsoft to get Outlook to a common code base for multiple platforms.

At the same time, during the period up to 2029 when Microsoft’s committed support for Outlook classic ceases, Microsoft will implement important AI-powered features in Outlook classic to keep corporate customers happy.

At the same time, I believe that Sureen’s memo will force the Outlook development teams to respond with proposals to become more aggressive about bringing AI-powered features into Outlook based on the new Outlook framework. I don’t see any appetite for a third Outlook flavor over the next few years (Outlook classic, new Outlook, and Outlook AI++). That’s not how Microsoft works, especially in a space where they need to keep large corporate customers happy and don’t want to see support costs escalate due to client profusion.

Customer Support and Expectations Moderate Grand Plans

As noted above, new leaders invariably have new ideas about how to move products forward. Just because some of those ideas leak outside is no reason to conclude that Microsoft will suddenly switch course for a product used by hundreds of millions of people. The practical issues of customer expectations and long-term support are enough to moderate even the most radical of new leader ideas. I suspect that the same will happen here. Stay calm and take some happy pills.

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