A. There is no built-in easy way to shrink a static VHD file. There is a utility called VHD Resizer,  that allows a VHD file to be shrunk to the size of partitions in the VHD file. For example, if you have a 127GB VHD file and 50GB is used in a volume, you can resize the VHD to 50GB. If you want to shrink it by more, you first need to shrink the volume inside the VHD from the OS. The way VHD Resizer works is to create a new VHD file and then copy the content from the old VHD into the newly created VHD