A: When Windows Server 2012 is connected to a storage array such as a SAN, it has access to very powerful hardware designed to move and copy data. When Windows Server 2012 needs to move or copy data on a SAN, the Windows OS reads the data into its buffer then writes it back out, constantly reading and writing the data. This uses resources on the host server such as CPU and memory and slows down the actual copy-move action as the SAN is capable of moving and copying far more efficiently.
Offloaded Data Transfer (ODX) lets Windows Server 2012 request that the SAN actually perform the move or copy actions directly, bypassing the host, which removes any performance hit on the Windows Server host and allows the SAN to perform the actions much faster.
Most of the major SAN vendors are working with Microsoft to support ODX in their SANs, which will allow any file move or copy operation that goes through the file service APIs such as command line tools, Windows Explorer and even Hyper-V to be actioned directly by the SAN. Some vendors that have tested and will have available ODX solutions include Dell, HP, IBM, NetApp, EMC and Fujitsu.
Some key scenarios where the speed difference would be major would be moving a large virtual machine (VM) or even creating a new VM from a template on the SAN--the process can now take seconds instead of minutes. This same technology can be used between separate SANs that have support for cross SAN ODX.
If you are using a SAN with Windows Server 2012, definitely look for ODX support by the vendor, as it will give better disk performance and save resources on the actual host.
Microsoft has some good information on ODX at TechNet, and a whitepaper about ODX is available too.