The April 4, 2017, update for Skype for Business enables IT administrators to hide the Skype for Business Contacts folder in Microsoft Outlook and Outlook Web App. To do this, administrators can use a new client policy GPO entry, EnableExchangeContactsFolder, by setting its value to $false.
Administrators may want to hide the Skype for Business Contacts folder in some cases to prevent stale or inaccurate Contact Card data from appearing to Outlook or Skype for Business clients. Clients must be updated in order to honor this policy setting in on-premises environments. After the folder is hidden, a Skype for Business client no longer adds contact data from this source to the Contact Card that is displayed.
In most cases, the ability to search your Skype for Business contacts in Outlook or Outlook Web App is not affected. Additionally, Microsoft Skype for Business 2016 clients that have the EnableExchangeContactSync policy parameter enabled will continue to synchronize contact updates to Microsoft Exchange Server.
If you use the latest Office 365 Outlook Web App, you can see the Skype for Business contacts directly in the Skype for Business 2016 chat sidebar. Similarly, if you use the mobile or desktop client, you can use the Skype for Business 2016 client to view the Skype for Business contacts.