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Virtual server environments can benefit tremendously from deduplication. Administrators typically try to reduce the administrative burden by keeping virtual machines as consistent as possible. This means that a large number of an organization's VMs might run a common operating system, use a common set of patches, or run a common set of infrastructure applications (such as backup agents or antivirus agents). This consistency means that there is redundancy among virtual machines.
Source-side deduplication can be used to ensure that only unique storage blocks are backed up, so long as the virtual machines share a common storage mechanism. That alone can go a long way toward making VM backups more efficient. Target-side deduplication can also be used to decrease backup storage consumption by eliminating cross-host or cross-storage pool duplication that is not addressed by source-side deduplication.