Microsoft in a lengthy post on Windows 8 blog details about the cloud-based People Metro app. We use smartphones, computers and other devices like tablets, and our contacts are stored everywhere, it becomes cumbersome to organize the contacts with out any software. People app in Windows 8 solves this problem by pulling your contacts from everywhere to your People app in Windows 8.
If you have tried either Windows 8 Consumer Preview or Release Preview you might know by now the People app stores contacts in Windows 8. The People app uses cloud-based service to pull all your contacts from email, social accounts, phone in once place. Data is synced from these accounts to keep the updated information instead of one time imports from these networks.
People app uses Exchange ActiveSync and other standard APIs offered by social sites like Facebook, Twitter and LinkedIn to keep the contact list in Sync. If you add a new contact or delete a contact or un-friend them it is reflected in your contacts. You can view contacts and interact with them by sending messages through supported services.
People app also maintains one contact information for contacts who are in multiple social networks or email.
The People app – just like Windows Phone and Hotmail – automatically detects that all of these contacts are the same human being, and presents them to me as a single “linked” contact with all the data together in one place, on one tile, etc. And very importantly, it does this without messing with any of the underlying source data.
Microsoft admits this can’t be perfect all the time, so users will be able to edit the contact list themselves to add or delete and make changes, this is not yet available for Windows 8, it will be added later.
Due to security reasons it won’t sync any Exchange data to the cloud, to respect the business users privacy. That means you have to add these contacts manually.
Via MSDN Blogs