Microsoft Outlook uses two file types for holding message, calendar, task and notes data: PST and OST files. PST files are created in the user's computer for non-Microsoft Exchange accounts, which includes Web-based email and myriad POP and IMAP accounts provided by an ISP.
Microsoft Exchange and Hotmail
OST files are local files that are mirror images of the data stored on an Exchange server or for accounts using Outlook Connector for Hotmail. If a user migrates to a new machine, the OST file is created in the new computer. When there is no network connection, Outlook users can work offline, and their data is synchronized with Exchange and Hotmail when back online.
In order to stay under server storage limits, data can be moved from the server to PST files on the user's computer. See Outlook
and Microsoft Exchange