Question : How does exchange work?

I came across a fact that exchange server does not use PST and outlook directly connects to the server and whatever you see in your outllok is actually NOT pst  data file but directly coming data from server.

So my outlook actually works like a browser now where I log in  and it loads everything from the server each time. Doesn't it raise network latency?

Answer : How does exchange work?

it is a RPC connection to a database
you can utilize cached-mode with Outlook to run from a localized copy (OST file)