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We know it might be a bit confusing....
Please see below to easily understand hosted Exchange.

So what is "hosted"?

In the past, Microsoft Exchange was deployed on-premises. This meant you needed to buy a server, pay for licenses, and hire an IT person to install and maintain it.

With Hosted Exchange, your Exchange server is installed and managed in the cloud, as a service, with no fees upfront. You get all the functionality of Exchange with none of the overhead. Intermedia performs all installation, maintenance, upgrade and support activities on your behalf for a predictable monthly fee.

Hosted Exchange

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and in sync on everything.

Get email, calendar, and contacts
delivered to your PC, Mac, Mobile or Tablet.

Exchange vs. Outlook: What's the difference?

Many people think Exchange and Outlook are synonymous. They’re not. Outlook is the program you use on your computer to access your email, calendar and contacts—which is powered by Exchange. And while you can actually use virtually any email client with Exchange, Exchange unlocks Outlook’s most sophisticated productivity features.