The primary benefit of compressing your data is to reduce the size of the file to help save disk space. An added benefit is greatly improved performance over a network, because you are transferring a reduced amount of the data being read from disk and transferred to the server or direct read application. However, since compressed data must be decompressed to draw to the screen, it can be slower than data that is not compressed and can increase CPU requirements on the server or application. Compression can also be applied on image services when transmitting pixels from a server to client applications.
This is transmission compression by reducing band width requirements.
The way to improve raster size efficiency is through image compression. And there are several ways to use GIS compression to reduce file size and still maintain quality of data.
ArcGIS can store compressed data in the following formats: IMG, JPEG, JPEG 2000, TIFF, Esri Grid, or in a geodatabase. When storing data in the geodatabase, the blocks of data are compressed before they are stored.