My Azure service depends on a huge filetree and I try to deal with that filetree using VHDs. What I currently plan to do is create a VHD file, mount it, format it to NTFS and enable NTFS transparent compression, then copy the filetree there. Then I'll upload the VHD file to Windows Azure Blob Storage. When an Azure instance starts it will download the VHD file, mount it and use it transparently as if it was in a local folder.
Everything sounds great, but the filetree is something like 800 megabytes. With NTFS compression enabled it fits into a 600 megabytes VHD file. Yet if I ZIP the filetree it occupies around 400 megabytes.
I want to have a file as small as possible and without a need to unpack it - so that it can be "mounted" and used transparently. That's like VHD, but with better compression.
Can I have a VHD with better compression?