Last November, Microsoft announced an initiative to adjust the way that Windows devices of all kinds receive updates. Broadly speaking, the purpose of the initiative is to reduce the download size of updates, make them require less local processing, and give users more control over the time of installation. After a few rounds of testing with its Windows Insiders, Microsoft announced that its PC users can soon expect the download size of major Windows updates to decrease by about 35%.
This drop in size will be made possible by what Microsoft calls differential download packages. These packages don't include the files that will remain unchanged in the new build. Instead, these packages contain only new files and "binary deltas" designed to adjust existing files on users' systems. Files that are unchanged in the new build will simply be copied over from the current OS. The differential packages can be considerably smaller than what Microsoft calls canonical download packages, which contain a full, self-contained set of files.
The above graphs from Microsoft shows how using differential packages reduced the size of updates for many of its Windows Insiders. While some users still had to download 2.56GB or more for this particular build, many were able to get away with a 900MB download. Regular Windows users shouldn't get too excited about those exact numbers, though. Microsoft indicated that since Windows Insiders get so many updates, their differential download packages can be smaller than the updates that retail Windows users can expect.
Microsoft plans to roll out this feature with the upcoming Windows 10 Creators Update. Since that update will contain the tech for differential download packages, users shouldn't expect the Creators Update itself to be smaller than previous major updates. However, users should benefit from the tech in subsequent updates.