The backup software has 3 caching options at its disposal. The purpose of the cache is to speed up subsequent uploads and it can be extremely useful in situations where a file is constantly changing.

You can change the caching option by logging into the software and going to Menu > Advanced Options > Caching Options.

Here are the three options:

Retransfer Entire File
This option does exactly that, it retransfers entire files from the computer to the cloud regardless of what portions of that file have changed. Once in the cloud, the backup versions are then updated as necessary. This option has the smallest local storage requirement but the largest bandwidth requirement.
Use Binary Compression
This option stores every file locally in the separate cache. It has the largest local storage requirement (basically equal to the size of the backup set) but allows the software to easily pick out just the portions of files that have changed and transfer those. It has the largest local storage requirement but the lowest bandwidth requirement.
Use Cloud Backup Intellicache (Default Option)
Best of both worlds. Only files that need to be cached are copied over so that just portions of files that have changed can be picked out and transferred. This has a slightly larger storage requirement than Retransfer Entire File and slightly more bandwidth requirement than Binary Compression.
Deleting the Cache
If OBRM is taking up too much local space and you need to clear the cache. You can delete it by going to the following directory and deleting its contents (This depends on what version of the software you have installed).

For OBRM users: C:\ProgramData\Online Backup and Recovery Manager\Online Backup Cache

Once this has been deleted, the software will recreate the necessary cache files for new/updated files.

Changing the Default Cache Location
If you want to keep the cache on your local machine but store it on a different location, you can do so by going to Menu > Advanced options > Folders. From here you can change the location of the cache folder.