Disk compression software works behind the scenes to automatically compress and decompress files stored on a compacted disk drive. It is somewhat akin to data compression programs like WinZip™ or WinRAR™ that compress files into smaller footprints, but there is one major difference: disk compression software compresses the entire disk, rather than select files.

Disk compression software was popular in the early to mid 1990s when the price of disk storage was relatively high and the average hard disk was 30 - 80 megabytes. Using a disk compression software package, one could essentially double the amount of data storage on a hard drive. Many users happily used disk compression with no problems, but for others the experience was sometimes problematic.

One issue with some disk compression utilities was that corrupted files would be compressed in that state, potentially leading to even greater data loss upon decompression. Another problem was data loss due to user error. Disk compression software created a large file it utilized as a virtual drive for storing and fetching data. Though this file was hidden by default in Microsoft™ Windows™ operating systems, users could make it visible, and in some cases deleted it. Compatibility was another stickler. Though disk compression software was made to be interoperable with operating systems and standard programs such as word processors and spreadsheets, some software had problems working correctly on a compressed drive.

Despite these issues, many people successfully used disk compression software as a preferable economic option over buying a larger hard disk. Disk compression software became so popular that Microsoft built a version of it into its operating systems. Users could make the switch to a compressed drive if they found themselves running out of room. A few clicks of the mouse was all it took.

Third party disk compression software was also available. These included Stac Electronics’ Stacker, Vertisoft Systems’ DoubleDisk Gold, and Integrated Information Technology (ITT)’s XtraDrive, among others. Disk compression software fell into disuse by the late 1990s as prices of storage medium fell.