Exchange Online is the Microsoft-hosted version of their Exchange Server email software. Exchange Server was launched about 20 years ago and has become a staple of business communications across the globe.
Exchange Online came about in 2011 and it offers some nice advantages for businesses. One of those is that it allows you to avoid investing in a new Exchange Server. It also allows you to avoid the ongoing investment in managing and maintaining that server. (Microsoft also allows for hybrid deployments, for organizations that don’t want to immediately move everybody to Online).
Microsoft is hosting Exchange Online in their data centers and offering SLAs guaranteeing security and availability. For many businesses, this will actually probably improve security and access. Exchange Online is, of course, compatible with Outlook, and it offers some web-based features and applications that aren’t available with Exchange 2016. Microsoft is offering Exchange Online both as part of Office 365 plans and as a stand-alone email option.