IDC recently released its Worldwide CDN/Caching Competitive Analysis, which confirmed, not surprisingly, that last year was dismal for the industry.

As the service provider opportunity dried up, so did the caching market. That meant companies had to turn their attention to enterprise companies, and it wasn't always easy. According to IDC, the CDN/caching market last year dropped 42%, from $426 million in 2001 to just $249 million.

In the report, IDC analyst Cindy Borovick says there will be improvement. She says the market is holding steady this year and growth should start again in 2004.

In the meantime, the market has consolidated and shifted. Today, Network Appliance is the leading CDN/caching vendor with a 37% share of the market, up from 25% in 2001. Cisco increased its market position even more, jumping from just 9% share to 25%.

Third is BlueCoat Systems, which changed its name from CacheFlow last year to stress its new focus on security. It has done well marketing its Internet gateway as a security appliance and now holds 11% of the CDN/caching market, according to IDC.

The days of the simple cache are gone, Borovick says. Companies need to provide products that not only do caching, but also perform filtering, virus scanning, streaming and business application acceleration.

Ann Bednarz is associate news editor at Network World.