We'd like to publish a lot of images to the server with size of more than 500GB and it will be cached so its gonna be a huge performance problem when loading....Is there any smaller sized raster format that can be handled by ArcGIS Server within a service? Thank you for helping!
Are you able to register the imagery location as a data store with ArcGIS Server?
You have the option to register your on-premises data stores and cloud stores. In doing so, you are registering data folders, databases, and geodatabases with ArcGIS Server so that services you publish can reference the data in those folders, databases, and geodatabases.
Taking advantage of mosaics and Image Server (Image Server extension for pre-10.5 versions) would help. It is a separate purchase and maintenance, and does require ArcGIS Server "core". There are some good links
Imagery | ArcGIS Resource Center including Image Management Workflows | ArcGIS Resource Center which you may want to take a look at.
See my response in your related thread on caching https://community.esri.com/message/692432-re-catched-image-service-vs-catched-mapservice#comment-692...