What does this Backend Cloud Service for Outlook store and for how long?
Microsoft stores a subset of email, calendar information and attachments. It is said to be stored for atleast a month, but longer if the user accesses the items more then once.
Today it stored in Amazon Web Services, but during 2015 it will be migrated to Azure and be united with Office 365. Meaning it will have the same Level of Security and Service Level Agreement as Office 365.
Amazon is hosting this in the United States at the moment, but after migration to Azure it will be hosted in the same region as your mailbox. Which is part of the Principal in the Office 365 Trust Center.