A virtualized storage array provides deduplication for a primary storage array that supports VVOLs. The VVOLs may be created for VMs that support host applications and guest OSs in a VDI environment. A VVOL is initially created as a virtualized managed drive that is backed by the virtualized storage array. The data is deduped by the virtualized storage array. After deduplication the data is either maintained on the virtualized storage array or moved to the primary storage array based on satisfying deduplication criteria such as reduction ratio.