BranchCache is an innovative Windows-specific networking technology that aims to improve network performance between branch offices and central office servers by reducing WAN link utilization. This technology was first introduced in Windows 7 and Windows Server 2008. BranchCache caches content (both web-based and Windows file-sharing based) that is retrieved often from the central servers. It can work in two modes:

• Distributed Cache. In this case all client computers at the branch office work together to cache content, in a peer-to-peer setup. Before retrieving new content, a client computer will first contact the other local PCs to check whether that content is already available.
• Hosted Cache. In this case a single server computer at the branch office is designated to act as the cache, and all clients will consult it before retrieving new content.

References:

• http://technet.microsoft.com/en-us/library/dd637832%28v=ws.10%29.aspx