Hierarchical Address Books are a new feature that comes as part of the Exchange 2013 offering. They quie simply allow you to map out an address book based on a hierarchical structure of your organization. For example you can drill down into different nodes of a tree:
For example the top level (your organizational root) could be the paren company, followed by child compaines and then departmentalized.
For more information regarding seting up HAB's please refer to this article.
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