When you are running Microsoft Exchange Server and doing a recovery of data while off the network, you can significantly decrease the startup time of the Exchange directory by using a HOSTS file.

An Exchange Server computer must sometimes be taken off the network to recover data from the directory or information store. When the Exchange directory starts, it tries to communicate with every other servers in the site by host name. If DNS, WINS, and LMHOSTS files are all in place, each name resolution method must time out multiple times. If DNS, WINS, and LMHOSTS are not in place, the server attempts to broadcast each host name for resolution. However, if a HOSTS file is used and points every host name to the recovery server's loopback IP address, the IP connection is established immediately and fails on the RPC connection. This circumvents the server's attempting to contact the host in any other fashion and significantly cut down the directory startup time.

An off-network recovery occurs when the Exchange Server computer is taken off the regular corporate network to recover individual data in the directory, private information store, or public information store. A couple of examples of this would be to export required fields of the directory to a CSV file, or to extract permissions (ACLs) from a public folder.