Backup and Restore fails with error - Object policy is not compatible with datastore space efficiency policy configured on the cluster

Products

• VMware vSAN

Issue/Introduction

• Backup software reports below error while taking backup or during restoration.
  
"Object policy is not compatible with datastore space efficiency policy configured on the cluster."

Environment

VMware vSAN (OSA)

Cause

• This issue is caused due to an incorrect Space efficiency set on vSAN Storage policy.

Example:
On a vSAN cluster where the De-duplication and Compression is enabled, but if the Space efficiency in Storage policy is configured as Compression only. This will cause the vSAN object creation to fail.

• In vCenter server, /var/run/log/vpxd.log will report the task failed as it 'Failed to create object'.
  
  ####-##-##T##:##:##.###+##:## warning vpxd[08035] [Originator@6876 sub=Vmomi opID=mck6abvq-699520-auto-ezr5-h5:70301364-58] VMOMI activation LRO failed; <<########-####-####-####-############, <TCP '127.#.#.# :
####'>, <TCP '127.#.#.# : 57318'>>, group-v4, vim.Folder.createVm>, N3Vim5Fault16CannotCreateFile9ExceptionE(Fault cause: vim.fault.CannotCreateFile
--> )
--> [context]########[/context]
2025-07-09T15:16:29.024+05:30 info vpxd[08035] [Originator@6876 sub=vpxLro opID=mck6abvq-699520-auto-ezr5-h5:70301364-58] [VpxLRO] -- FINISH task-873685
2025-07-09T15:16:29.025+05:30 info vpxd[08035] [Originator@6876 sub=Default opID=mck6abvq-699520-auto-ezr5-h5:70301364-58] [VpxLRO] -- ERROR task-873685 -- group-v4 -- vim.Folder.createVm: vim.fault.CannotCreate
 key = "vob.vsanprovider.object.creation.failed",
arg = <unset>,
message = "Failed to create object."
(vmodl.LocalizableMessage) {
key = "vob.vsan.clomd.incompatibleDatastoreSpaceEfficiency",
-arg = <unset>,
message = "Object policy is not compatible with datastore space efficiency policy configured on the cluster"
  
  

Resolution

• Change the vSAN Storage policy's Space Efficiency parameter to  "No preference".
  
  

• Navigate to vSphere Client > Menu > Policies and Profiles > VM Storage Policies > Select the Policy to be updated > Edit: