Question about Outlook Express

I have an Android phone (Samsung Galaxy S4) synced with my Hotmail account.  Most of my contact information is saved in my Hotmail account, and all this information syncs with the contacts on my phone.  Yesterday when the problems started with the various Microsoft services I noticed that none of this contact information was available on my phone anymore and that the Microsoft Exchange ActiveSync icons next to each synced contact had disappeared.  Today all the information has returned to my phone, so I assume Microsoft has made progress in fixing the problem.  But I was very surprised that when there was a problem with a cloud service from Microsoft, it apparently means all the synced contact information just disappears from my phone!  I understand that the actual synchronization process may not work while the could service is down, but I don't understand why the information would be gone from my phone.  Shouldn't all this contact information be saved locally on my phone so that I can always access it even when outlook.com and related services aren't functioning properly?

I also use the Windows Live Mail desktop program, which also has contact information synced with my Hotmail account.  Despite the problems with the Microsoft services, all my contact information remained on my computer, as expected.  So it was only on my phone where all the information disappeared.  So I don't know if this is an Android problem or a Microsoft problem or some combination.

How can I make sure that all my contact information stays on my phone, even when there is a problem with Microsoft's cloud services, but that the contact information will also continue to sync with my Hotmail account when the cloud services are working properly?