Virtual machine hard drive image files (VHDs) are stored in a virtual machine image store by a virtual machine image server. The BITS protocol with integrated Remote Differential Compression (RDC) is used to transfer one or more VHDs to a virtual machine client. The RDC may compare segments of preexisting VHDs on the virtual machine client with segments of the requested VHDs to minimize the number of segments that are transferred to the virtual machine client. The requested VHD may then be reconstructed from the received segments and the segments preexisting on the virtual machine client. In addition, the host operating system or applications of the virtual machine client may also be used as a source of segments for the RDC, for example.
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