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What is the difference between backup methods like differential and incremental?

What are the differences between the various backup methods (e.g., differential and incremental), and what is the difference when you have to recover using those methods?

Rather than reinvent the wheel, I will point you to an excellent explanation of the various backup types from one of the ATE experts on SearchStorage.com, Jim Booth. Booth states, "As a backup practice, both incremental and differential backups accomplish the same thing -- they allow you to reduce the resources needed to backup data. But how they accomplish this task is different. If archive bits are cleared after each backup, this is called an 'incremental' backup. If the archive bits are cleared only after a full backup, then this is a 'differential' backup.

Incremental Backups

"An incremental backup clears the archive bits each time data is backed up. This means that each backup will be small. To perform a restore, a copy of the last full backup and each incremental will have to be restored to get all files to their last known state. In most cases, a full backup will be performed weekly, while an incremental backup is performed daily. 

Differential Backups

A differential backup clears archive bits only after a full backup. This means that daily backups get gradually larger, but restore is easier. A full restore only requires the last full backup and the last differential. Incremental backups allow for a more granular restore, but differential backups are typically easier to restore."

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