Techniques are provided for reducing the amount of data that to be transferred in a hybrid cloud system in order to spawn a VM at a private cloud computing system from a template library stored in a public cloud computing system. Instead of storing full virtual machine templates, template libraries at the public cloud computing system are “differential” libraries. Differential templates in these differential libraries only include data that is different as compared with either a base template or another differential template. Assuming a private cloud system already stores a base image, the private cloud system may spawn a VM based on a particular template simply by downloading the appropriate differential templates. This technique reduces the total amount of data that needs to be downloaded from the public cloud system in order to spawn a particular VM.