CHAR, VARCHAR, and BINARY columns can be compressed to save disk space. For example, you can compress a column in which large BLOB files such as BMPs and TIFFs are stored. Compression is achieved using the deflate compression algorithm. This is the same algorithm used by the COMPRESS function, and is also the same algorithm used for Windows ZIP files.
If you specify that a column is compressed, database server activities such as indexing, data comparisons, and statistics generation may be slightly slower if they involve the compressed column because the values must be compressed when written, and decompressed when read.
Compressed columns can reside inside of encrypted tables. In this case, data is first compressed, and then encrypted.
Column compression is not beneficial for columns containing values under 130 bytes, or values that are already in a compressed format, such as JPG files. In fact, compressing columns that contain compressed values may actually increase the amount of storage required for the column.
To compress columns, use the COMPRESS clause of the CREATE TABLE and ALTER TABLE statements.
You can determine the benefits you are getting by compressing columns using the sa_column_stats system procedure.