@Bharat ... No apologies needed from the Exchange Team. But it IS a very *dumb* idea on the part of the Outlook team.
Retention policies and personal archive are features of Exchange... not Outlook. Outlook is just a UI for accessing those features... same as OWA. What's absurd is the fact that after licensing standard and enterprise CALs for your Exchange users to have the feature, we're told that we have to spend an additional $150+/computer for what is essentially a second copy of Outlook OR spend that much on a higher level suite that contains a lot of things we neither want or need in our business. It's blatant double-dipping on the part of the Office team. I mean, how is it logical that the feature is enabled on the standalone copy but not on the standard or small business suites? I hope you'll do me (and your customers) a favor and pass this complaint onto the Outlook product team to fix for the next release or service pack.
Anyway, I do apologize for ranting on this post about the issue, but given the increasing number of posts about this subject it's something that is going to seriously impact your customers more and more.