Hi vLarus,
Thanks for your reply. Although not all the 3TB virtual disk is used, a large portion of it is and so makes the VEEAM backup equally large. Essentially it is trying to backup the OS + DATA, where I want it to backup just the OS.
How is a system normally set up to avoid this kind of thing? Surely large organisations with many TB's of data separate the OS VM from the data so that the OS VM can be easily backed up or restored? Wouldn't it have to be separated for vMotion to work?