Using Veeam Backup and Replication, I found that this size of the backup file can be greatly reduced if you use Sdelete to zero out the free space in the VMs being backed up (Fixed Disk).
I use a script from Yellow Bricks, which defrags all local drives then runs sdelete to zero out free space. I usually run this script after major program installs, Drive increase or on a quarterly bases.
Set WshShell = WScript.CreateObject("WScript.Shell")
Dim fso, d, dc
Set fso = CreateObject("Scripting.FileSystemObject")
Set dc = fso.Drives
WshShell.RegWrite "HKCU\Software\Sysinternals\", 0, "REG_SZ"
WshShell.RegWrite "HKCU\Software\Sysinternals\SDelete\", 0, "REG_SZ"
WshShell.RegWrite "HKCU\Software\Sysinternals\SDelete\EulaAccepted", 1, "REG_DWORD"
For Each d in dc
If d.DriveType = 2 Then
Return = WshShell.Run("defrag " & d & " -f", 1, TRUE)'
Return = WshShell.Run("sdelete -c " & d, 1, TRUE)
Set WshShell = Nothing