Live migration (LM) between Hyper-V hosts may fails with
“The virtual machine cannot be moved to the destination computer. The hardware on the destination computer is not compatible with the hardware requirements on this virtual machine. Virtual machine operation failed at migration destination. The destination ‘PathToVM’ is not valid because it’s compressed”
We know that there are no special requirements for live migration in 2012/2012 R2:
But if you have enabled “Compress this drive to save disk space” on the disk level and compression on the folder level, live migration fails. Hyper-V doesn’t support compressed destination folder. I’ve never seen any official notes about it. If you have, please comment this post or contact me. IMO, it must be in the requirements for LM.
Based on the Russian TechNet thread: