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Microsoft has announced that Windows 8.1 Update contains a new install option, WIMBoot, that was made to place the operating system inside devices with small storage options like tablets



From Neowin:
Windows 8.1 Update was released to the public earlier this week, but the new version of Microsoft's latest OS could be installed on tablets that have storage capacities as small as 16 GB. Today, Microsoft announced that it has introduced a new install option for Windows 8.1 called Windows Image Boot, or WIMBoot, that's been made to allow those kinds of products a way to get a full version of the OS while still having room for the installations of apps and other programs.

In a blog post, Microsoft said they dislike the typical way that Windows is installed on a new PC via extracting folders from an image file, WIMBoot keeps all of those files compressed. However, the user of the device sees no difference when they explore their storage in the C: folder.
  Windows 8.1 adds WIMBoot, 16 GB devices can have 12 GB free with new OS install option