A differencing disk is also a virtual hard disk (VHD). This is used to store the changes made to its parent virtual hard disk. It is more like a concept of parent-child relation. It makes the parent VHD read only and changes are applied to another disk called Differencing Disk. How to proceed with creating a differencing disk?
Click on that particular VM Settings and add a new hard disk as usual, but note to select the type as Differencing and continue as usual. Select the parent virtual hard disk when prompted. This parent hard disk must be our original VHD. Clicking Finish creates the Differencing Disk.
Now let us assume a scenario like we have created 3 virtual machines (with no operating system installed) and we have one VHD which has the operating system, let’s say Windows Server 2012 and some files. Let us say that the requirement is like the users’ needs to access these files and change as they wish, but you wish to get a backup copy of the original files, here’s where differencing disks can be useful.
All the 3 VM’s can access the underlying OS from the parent hard disk and the files too. As already said, creating a differencing disk makes the base (original) disk read only. So, the changes done to the files accessed through original VHD, is actually saved in the differencing disk drive inside that virtual machine. The parent (base) disk is not affected by these changes.
Also, it is possible to attach a parent disk with as many child (differencing) disks as you want. The differencing disks expand dynamically as the data is written to it. The maximum size of this disk will be based on the parent disk, that is if the parent disk has a size of 100GB, then the differencing disks also will have maximum capacity of 100GB.
Note: If the base disk becomes corrupted or unavailable, all virtual disks that are dependent on the original disk are lost too.