Abstract: In cloud computing and services, virtual machine powers with its features by providing resources and various infrastructure which is actually expected by large businesses and organizations. A challenging problem yet cannot be solved is the storage file system of a virtual machine instance. The existing deduplication concepts to reduce the VM storage are under DEDE and SAN clusters. In case of extensive VM hosting, all the existing techniques are unable to convince since they have inadequacy to cost. Our proposed system addresses accessible deduplication storage exclusively for Extensive VM implementation. Design of this system offers rapid creation of instances of VM including transmission of data in peer-to-peer networks. A wide range of features like very less utilization of VM storage, cloning of VM instances quicker and using copy on read techniques peer caches are managed to avoid bottlenecks.