"Can anyone tell me what this might be please?"
Exchange server is the grown up version of microsoft exchange for mail handling. It does the job of a proxy and more. All the client machines would use Outlook in the normal way, except that they would be in a client-server relationship with exchange server instead of peer-to-peer.
This is unlikely to be worth your while for a small network, but I have seen it done.
However you need to be clear about the nature of your network, either it's peer-to-peer or it has a server and clients. Servers serve, workstations work. Trying to combine the two usually causes problems.