The Server Backup relies on Windows Server Backup. Windows Server Backup stores the backups in a virtual hard drive (VHD). Windows Server Backup will perform checks against the VHD and determine if the file needs to be compacted. If the file needs to be compacted Windows Server Backup will perform the compaction during a regularly scheduled backup. Depending on the size of the VHD file, the compaction may take a really long time sometimes in excess of 10 hours. The compaction of the VHD files is normal and should occur infrequently. The backup should complete once the compaction is complete.