IIS 7.x improves internal compression functionality dramatically making it much easier than previous versions to take advantage of compression that's built-in to the Web server. IIS 7.x also supports dynamic compression which allows automatic compression of content created in your own applications (ASP.NET or otherwise!). The scheme is based on content-type sniffing and so it works with any kind of Web application framework.

There are two approaches available here:
- Static Compression
Compresses static content from the hard disk. IIS can cache this content by compressing the file once and storing the compressed file on disk and serving the compressed alias whenever static content is requested and it hasn't changed. The overhead for this is minimal and should be aggressively enabled.

- Dynamic Compression
Works against application generated output from applications like your ASP.NET apps. Unlike static content, dynamic content must be compressed every time a page that requests it regenerates its content. As such dynamic compression has a much bigger impact than static caching. Before you read this tutorial, I would recommend you to read this documentation how to setup dynamic compression in IIS 7.

How Compression is configured:
Compression in IIS 7.x  is configured with two .config file elements in the <system.WebServer> space. The elements can be set anywhere in the IIS/ASP.NET configuration pipeline all the way from ApplicationHost.config down to the local web.config file. The following is from the the default setting in ApplicationHost.config (in the %windir%\System32\inetsrv\config forlder) on IIS 7.5 with a couple of small adjustments (added json output and enabled dynamic compression):
<?xml version="1.0" encoding="UTF-8"?>
<configuration>
  <system.webServer>  

    <httpCompression directory="%SystemDrive%\inetpub\temp\IIS Temporary Compressed Files">
      <scheme name="gzip" dll="%Windir%\system32\inetsrv\gzip.dll" staticCompressionLevel="9" />
      <dynamicTypes>
        <add mimeType="text/*" enabled="true" />
        <add mimeType="message/*" enabled="true" />
        <add mimeType="application/x-javascript" enabled="true" />
        <add mimeType="application/json" enabled="true" />
        <add mimeType="*/*" enabled="false" />
      </dynamicTypes>
      <staticTypes>
        <add mimeType="text/*" enabled="true" />
        <add mimeType="message/*" enabled="true" />
        <add mimeType="application/x-javascript" enabled="true" />
        <add mimeType="application/atom+xml" enabled="true" />
        <add mimeType="application/xaml+xml" enabled="true" />
        <add mimeType="*/*" enabled="false" />
      </staticTypes>
    </httpCompression>   

    <urlCompression doStaticCompression="true" doDynamicCompression="true" />   

  </system.webServer>
</configuration>


What is httpCompression and How it works?
Basically httpCompression configures what types to compress and how to compress them. It specifies the DLL that handles gzip encoding and the types of documents that are to be compressed. Types are set up based on mime-types which looks at returned Content-Type headers in HTTP responses. For example, I added the application/json to mime type to my dynamic compression types above to allow that content to be compressed as well since I have quite a bit of AJAX content that gets sent to the client.

How to Enables and Disables Compression
The urlCompression element is a quick way to turn compression on and off. By default static compression is enabled server wide, and dynamic compression is disabled server wide. This might be a bit confusing because the httpCompression element also has a doDynamicCompression attribute which is set to true by default, but the urlCompression attribute by the same name actually overrides it.

The urlCompression element only has three attributes: doStaticCompression, doDynamicCompression and dynamicCompressionBeforeCache. The doCompression attributes are the final determining factor whether compression is enabled, so it's a good idea to be explcit! The default for doDynamicCompression='false”, but doStaticCompression="true"!

How Static Compression Works
Static compression works against static content loaded from files on disk. Because this content is static and not bound to change frequently – such as .js, .css and static HTML content – it's fairly easy for IIS to compress and then cache the compressed content. The way this works is that IIS compresses the files into a special folder on the server's hard disk and then reads the content from this location if already compressed content is requested and the underlying file resource has not changed. The semantics of serving an already compressed file are very efficient – IIS still checks for file changes, but otherwise just serves the already compressed file from the compression folder.

Because static compression is very efficient in IIS 7 it's enabled by default server wide and there probably is no reason to ever change that setting. Dynamic compression however, since it's more resource intensive, is turned off by default. If you want to enable dynamic compression there are a few quirks you have to deal with, namely that enabling it in ApplicationHost.config doesn't work. Setting:
<urlCompression doDynamicCompression="true" />

in applicationhost.config appears to have no effect and I had to move this element into my local web.config to make dynamic compression work. This is actually a smart choice because you're not likely to want dynamic compression in every application on a server. Rather dynamic compression should be applied selectively where it makes sense. However, nowhere is it documented that the setting in applicationhost.config doesn't work (or more likely is overridden somewhere and disabled lower in the configuration hierarchy).

So: remember to set doDynamicCompression=”true” in web.config!!!

Dynamic Compression
By default dynamic compression is disabled and that's actually quite sensible – you should use dynamic compression very carefully and think about what content you want to compress. In most applications it wouldn't make sense to compress *all* generated content as it would generate a significant amount of overhead.

There are also a few settings you can tweak to minimize the overhead of dynamic compression. Specifically the httpCompression key has a couple of CPU related keys that can help minimize the impact of Dynamic Compression on a busy server:

dynamicCompressionDisableCpuUsage
By default these are set to 90 and 50 which means that when the CPU hits 90% compression will be disabled until CPU utilization drops back down to 50%. Again this is actually quite sensible as it utilizes CPU power from compression when available and falling off when the threshold has been hit. It's a good way some of that extra CPU power on your big servers to use when utilization is low. Again these settings are something you likely have to play with. I would probably set the upper limit a little lower than 90% maybe around 70% to make this a feature that kicks in only if there's lots of power to spare. I'm not really sure how accurate these CPU readings that IIS uses are as Cpu usage on Web Servers can spike drastically even during low loads. Don't trust settings – do some load testing or monitor your server in a live environment to see what values make sense for your environment.

Finally for dynamic compression I tend to add one Mime type for JSON data, since a lot of my applications send large chunks of JSON data over the wire. You can do that with the application/json content type:
<add mimeType="application/json" enabled="true" />

In summary IIS 7 makes GZip easy finally, even if the configuration settings are a bit obtuse and the documentation is seriously lacking. But once you know the basic settings I've described here and the fact that you can override all of this in your local web.config it's pretty straight forward to configure GZip support and tweak it exactly to your needs.

Static compression is a total no brainer as it adds very little overhead compared to direct static file serving and provides solid compression. Dynamic Compression is a little more tricky as it does add some overhead to servers, so it probably will require some tweaking to get the right balance of CPU load vs. compression ratios. Looking at large sites like Amazon, Yahoo, NewEgg etc. – they all use