There are more data compression file types than you can count these days. However, none of them is a one size fits all file type that can cover everything and still be shared as a single file to be unpacked and used as is on another computer.

If you need to compress a particular file or folder, you might get away with ZIP, RAR, or even ISO files. But what do you do when you need to encapsulate or compress an entire HDD/SSD into one file?

What Is a VHD?

VHD stands for Virtual Hard Drive. This publicly available image format specification allows you to encapsulate an entire hard drive into a single file. An OS can then use and access it as a physical hard drive. Simply put, a VHD file is a digital copy of a hard disk or SSD that appears as a real storage drive for your OS.

A hard drive disk

A VHD file is similar to an ISO file, but instead of compressing (or encapsulating) a single CD or DVD, you're covering an entire storage drive. VHD files can host native file systems, including NTFS, FAT, exFAT, and UDFS, while also supporting standard disk and file operations. However, the maximum file size is limited to 2TB.

There are three main types of VHD formats as follows:

  • Fixed VHD: These files occupy a fixed amount of storage on the host machine's storage drive. However, the trade-off for a bigger file size is faster processing speeds and constant fragmentation.
  • Dynamic VHD: These VHD files change their sizes based on how much of their internal storage is full and are optimized for storage on host machines. There's still an internal limit to how big the drive can get, which is determined at initialization, but you get faster storage allocation.
  • Differencing VHD: The least popular of the three VHD formats, this format creates a copy of an existing disk, creating a parent and a child disk. Differencing VHDs allow the parent drive to be altered without the changes affecting the child VHD.

Much like an actual hard drive, these virtual drives can create disk sectors, new files and folders, execute user applications, and, last but not least, run an OS. This makes them the perfect choice for virtualization applications.

Although Microsoft publishes the specification freely for third parties to write their own programs to read and manipulate VHD or VHDX files, it retains control of the format. This means that the VHD format is pretty much exclusive to Windows unless used with a compatible third-party program on another OS.

VHD vs. VHDX

The VHD format specification has been available as a royalty-free license since June 2005. An extension to this format, VHDX, launched in 2012 and was supported by Windows 8 and Windows Server 8. This format added new capabilities, performance improvements, data corruption prevention, and a 64TB maximum file size. Other benefits of VHD files include the following:

  • Data protection against power failures
  • Support for custom metadata
  • Metadata automatically updates
  • VHDX is more adaptable to newer hardware

That said, VHDX is functionally equivalent to VHD, and, despite having inbuilt mechanisms to protect against data corruption, it's prone to file system corruption, much like VHD. This can be caused by poor network conditions during file transfer, corrupt source drive storage, and even interference from security programs.

Advantages of Using a VHD File

As you can probably guess by now, there are certain advantages to using a VHD file over traditional, physical storage drives.

Opened hard disk drive

The most significant advantage is that you can sen VHD files online or carry them around in a flash drive. This makes VHDs quickly deployable in the field. The other benefits of a VHD include the following:

  • Easier backup and restoration
  • Snapshot recovery
  • Quick replication
  • Isolation from the host or other VM OSes.
  • Eliminates the cost and size requirements for physical storage drives.

Where Are VHD Files Used?

VHD files are primarily used by virtualization programs such as VMware's VirtualBox and Microsoft's Hyper-V. You should note, though, that you must enable Hyper-V on Windows 11 before use. Since they operate as physical hard drives, they're perfect for VMs that need to run isolated OSes, file systems, manage applications, and so on.

That said, you can just as easily use them to create backups of your existing drive and keep them as digital archives for when you need to go back or recover your data. They're a cost-effective way of backing up multiple hard drives and easier to store as well—a feature often leveraged in enterprise applications.

How to Create a VHD File

Depending on what OS you're using, the exact steps for creating a VHD file differ from one another. If you're on Windows, you can use the Disk Management utility to create VHDs from your existing drives or partitions by following these steps:

  1. Press the Windows key to open the Start menu and search for Disk Management. Click the appropriate search result to open the tool. Alternatively, you can check out these other ways of opening the Disk Management tool.
  2. Select the drive or partition that you want to convert to a VHD file, and click Action followed by Create VHD.
    VHD file creation menu in Disk Management on Windows
  3. A prompt will open, asking you to enter the VHD path and size. You must also choose between the VHD and VHDX format specifications as well as the VHD type. Select the corresponding options according to your needs and click the OK button.
    VHD file creation options in Disk Management on Windows

Windows will now create a VHD file of that particular drive or partition, which can later be mounted and used like another physical drive.

If you want to create a VHD file for your VM, the steps differ. For example, when creating a new VM, VirtualBox asks you whether you want to make a VHD file and the type of VHD format you want to use. Note that these files can be transferred to any machine and used with another VM.

VMware VirtualBox VHD creation options

Creating VHD files on macOS and Linux

If you're on macOS, Apple Support has a helpful guide on creating disk images using the Disk Utility on macOS Ventura, Monterey, Big Sur, Catalina, and Mojave. However, while these files are virtual drives, they might not be saved with a VHD extension.

The same applies to Linux as well. You can use the dd command to create VHDs straight from the terminal. The basic syntax looks like this.

        sudo dd if=/dev/root of=Virtual_Hard_Disk.img bs=1M count=1024
    

Here's what the different flags mean in the aforementioned command:

  • if=/dev/root: Path to the input file to provide a character stream during initialization
  • of=Virtual_Hard_Disk.img: Name and path of the virtual drive to be created
  • bs=1M: Dictates read and write speeds. The current flag allows the drive to read and write up to 1MB at a time.
  • count=1200: Determines the block size or the overall capacity of the virtual drive. The current count value creates a 1GB disk.

VHD Files Are Very Useful

While VHD files are functionally similar to a physical storage drive containing the same file system, disk partitions, and even hard drive sectors, they're simply virtual hard drives that appear as a physical drive to the OS. Outside of being perfect for VMs, they can also be effectively used for backing up physical drives.

This helps make virtualization more accessible and easier to set up. VHDs make it easier to share VMs between multiple computers, as you can simply copy the source VHD file for each VM to another computer, and it will work flawlessly with a properly configured VM.