Differential backup software is similar to incremental backup software, but usually uses a different reference than incremental backup software.
Usually the term differential backup is used in conjunction with deduplication.
Deduplication is an efficient way to reduce backup storage usage when taking frequent backups. It's important to note that because backups run frequently, compression alone isn't effective enough. A compressed backup is still a so-called full backup. Full backups are independent copies of data that may be restored individually on their own.
A differential backup is a backup set that refers to an older backup cycle, but instead of referring to the last backup cycle as in incremental backups, differential backups refer to the last full backup.
This means that you could delete several differentials after a full backup and still have a useful backup chain to restore from. Restoring an incremental backup chain, on the other hand, requires the full backup and each increment following after that. Increments may not be deleted individually as each increment refers to the previous one.
Differential backups are great when restoring because only one or two steps are necessary when restoring an entire backup set: First the full backup is restored, then just one differential if necessary.
When restoring incremental backup chains, the entire chain needs to be restored when you need the latest copy of your data; however, incremental chains are usually more efficient in space usage because only one day's difference needs to be stored in each increment.
Differential backups refer to the last full backup and hence the difference usually grows larger as time passes. The faster restore time, therefore, has a trade-off: it uses more storage than an incremental backup chain would use.
BackupChain provides both backup methods so you can use either backup strategy as necessary.