A. When converting a physical machine to a virtual machine, you have to choose whether to use a dynamic VHD or a fixed VHD. With a dynamic VHD, a VHD is created with the same size as the physical volume, but the only disk space used is the actual size of the data on the physical volume. If you select to migrate to fixed VHD, then a fixed-size VHD is created for the size of the volumeā€”so the entire space is allocated at the time of the fixed VHD's creation.

Some organizations have very large volumes that they want to migrate to VHDs, but don't want to use dynamic VHDs, because fixed VHDs are generally preferred over dynamic in production environments. (Note that the performance difference between fixed and dynamic VHDs is negligible in Windows Server 2008 R2).

It isn't possible to shrink a fixed-size VHD when performing a P2V migration via VMM 2008 R2 today. If you want to create a smaller, fixed-size VHD, you have a few options:

  1. Defrag the source physical volume then perform a shrink within the OS to make the volume smaller on the source system. Then perform the P2V.
  2. Use a dynamic VHD for the target.

Use a fixed VHD. Once the fixed VHD is created, shrink it using a tool such as VHD Resizer.