Update 2/26/2018: For the latest developments on the subject please see this blog post.
Out of 7.6 billion people in the world, only 360 million are native English speakers.
Although email has been the earliest and most widely-adopted platform for modern electronic communication, email addresses have only supported a limited subset of Latin characters (mostly due to historical reasons). People who don't read or speak English have been forced to use email addresses containing characters not used in their own language.
Many people have been working together to try to fix this situation. In fact, new email standards to support email address internationalization (RFCs: 6530, 6531,6532, 6533) were published in 2012. However, changes in standards are difficult to implement in the world of technology due to the millions of legacy systems that are still out there.
Microsoft is pleased to announce that we're joining the effort to adopt the new standards. Office 365 will enable Email Address Internationalization (EAI) support in Q1 2018. As a first step, Office 365 users will be able to send messages to and receive messages from internationalized email addresses. Admins can also use internationalized email addresses in other Office 365 features (for example, mail flow rules that look for EAI addresses, or outbound connectors to Internationalized Domain Name (IDN) domains). But please note that this new release will not support adding EAI addresses for Office 365 users, or IDN domains for Office 365 organizations. We will continue to evaluate these features as the standards are more widely adopted. We will also keep you posted on the plan to release this to Exchange Enterprise version.