As an outlook user, you have a outlook mailbox. When you configure your email client such as outlook, outlook express,etc., you will be asked to input a SMTP server. You should input smtp.live.com, port 587 here. This is the smtp server you submit your emails. The email client should login with your outlook account/password before submitting emails. The submission smtp server does not allow anonymous submission of emails. The smtp server allows email relay, i.e., you can send email to other email addresses other than firstname.lastname@example.org.
outlook.com has another smtp server to receive emails from other smtp servers on the net that are destined to email@example.com. The smtp server is outlook-com.olc.protection.outlook.com. It listens only on port 25(not 587). It serves server to server communication. It should never be connected by an email client. It allows anonymous email delivery,i.e., other email servers can send email to it without login. It does not allow email relay.