Data Compression was introduced in SQL Server 2008. This feature helps compress data inside the database, thus potentially reducing the size of the database. In the article titled, Data Compression: Strategy, Capacity, Planning and Best Practices, the author outlines several pertinent details regarding the implementation of this new feature. Some topics discussed included: What to Compress, Estimating Space Savings, Resource Requirements and the Side Effects of Compressing a Table or Index. The article also includes a couple of scripts that will help you determine what level of compression should be used.
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