you have integrated your Microsoft WSUS server into your Microsoft SCCM 2007 architecture.

So what is Peer Caching?

Peer caching is a new feature of BITS 3.0 that allows peers (computers within the same subnet of a network that have the peer caching feature enabled) to share files. If peer caching is enabled on a computer, the Automatic Update agent instructs BITS to make downloaded files available to that computer’s peers as well.

When the files have been downloaded, BITS caches them. When another (peer caching-enabled) computer tries to download the same update, BITS on that computer sends a multicast request to all of that computer’s peers. If one or more of the peers responds to the request, BITS will download the file from the first computer to respond. If the download from the peer fails or take too long, BITS continues the download from the WSUS server or Microsoft Update.

WSUS 3.0 Operations Guide

Or, to put that into a picture:

Branch Caching picture courtesy of Microsoft.

But never fear, Peer Caching for SCCM is on it’s way.  Microsoft are introducing that feature into SCCM 2007 SP2 as Branch Caching.  You’ll also need Windows 7 and Windows 2008 Server R2 to support it from the client end.

Some further links:
End-to-End WAN Optimization with BranchCache
Windows 7 BranchCache™ User Experience
Technical case study: Reducing Bandwidth Utilization with Windows 7 and Windows Server 2008 R2 BranchCache

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End-to-End WAN Optimization with BranchCache