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Capacity optimization is a general term for technologies used to improve storage use by shrinking stored data. Primary technologies used for capacity optimization are data deduplication and
data compression In information theory, data compression, source coding, or bit-rate reduction is the process of encoding information using fewer bits than the original representation. Any particular compression is either lossy or lossless. Lossless compressio ...
. These are delivered as software or hardware, integrated with storage systems or delivered as standalone products. Deduplication algorithms look for redundancy in sequences of bytes across comparison windows. Typically using cryptographic hash functions as identifiers of unique sequences, sequences are compared to the history of other such sequences, and where possible, the first uniquely stored version of a sequence is referenced rather than stored again. Different methods for selecting data windows include 4KB blocks to full-file comparisons known as
single-instance storage Single-instance storage (SIS) is a system's ability to take multiple copies of content and replace them by a single shared copy. It is a means to eliminate data duplication and to increase efficiency. SIS is frequently implemented in file systems ...
(SIS). Capacity optimization generally refers to the use of this kind of technology in a storage system. An example of this kind of system is the Venti file system in the Plan9 open source OS. There are also implementations in networking (especially wide-area networking), where they are sometimes called bandwidth optimization or
WAN optimization WAN optimization is a collection of techniques for improving data transfer across wide area networks (WANs). In 2008, the WAN optimization market was estimated to be $1 billion, and was to grow to $4.4 billion by 2014 according to Gartner, a tech ...
. Commercial implementations of capacity optimization are most often found in backup/recovery storage, where storage of iterating versions of backups day to day creates an opportunity for reduction in space using this approach. The term was first used widely in 2005."Capacity optimization" defined by searchstorage.com
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References

Capacity optimization through sensing threshold adaptation for cognitive radio networks (https://doi.org/10.1007%2Fs11590-011-0345-8) Software optimization {{software-eng-stub