Traditionally, if you wanted to test a new "Insider Preview" or a risky piece of software, you had to shrink your C: drive and create a new partition—a nerve-wracking process if something goes wrong. With a VHD, your entire second OS lives inside a single file on your existing drive. If you’re done with it, you just delete the file.
Use a tool like Disk2vhd (Microsoft Sysinternals) to convert a physical machine or installation to a VHD.
: These images are typically packaged for specific virtualization software: Hyper-V : Standard .vhdx format. VirtualBox : .ova format. VMWare : .vmdk format. 2. Creating a VHD from an ISO (Best for Permanent Use)