VHD file format is used to define a virtual hard disk drive. This virtual hard disk can be in the form of a partition of the physical hard disk.
This virtual hard disk can then act as normal hard disk drive unless designed for a specified purpose. The virtual hard disk being in a physical hard disk can also contain files and folders. This virtual hard disk is generally used for running virtual machine. This allows the single machine to host a number of systems on it. The virtual hard disk has a limitation of maximum possible space to be 2 Terabyte.
