There are a number of differences between Cached Exchange mode vs. Online mode. These differences effect the user’s features and interaction with the server.
Cached Exchange mode is useful because it keeps a local copy of the emails (entire mailbox) on the PC, whilst Online mode reads the emails from the server, only downloading a “stub” to show the user that emails are available. Cached Exchange mode however, puts a lot more strain on your Exchange server with more connections and bigger downloads.
Obvious uses for Cached Exchange mode are environments with latency, slow, restricted or expensive internet connections. This includes portable users.
Online mode uses are typically those who have large mailboxes or change computers regularly (hot desk users or terminal server / virtual desktop users), because Cached Exchange mode can take a while to download all the messages on first use and take up lots of space. Computers with security compliance regulations may also require online mode.
Finally, another difference between Cached Exchange mode and Online mode are that different features become available in Outlook depending on the mode you’re using. For example, search is limited in Online mode; You can only search for emails with specific conditions (such as From a particular user) if you are running Outlook in Cached Exchange mode.