Create Image on the fly: Works only if the Image is saved as a resource pointed to foundation/image component. Use html5smart image widget to save the image as a resource. URL will be pointed to the page jcrcontent.
An image on the fly.
Saves space on author, publish servers
Can create image to fit into any container without creating new images from Visual Designer
An image is saved as a resource in the content node so you do some manipulation like rendering grayscale, rotate.
Crops the image if width or height are not proper.
Throws error if image is deactivated but still code refers to the NamedServlet URL
Animated GIFs loses its animation.
Lose image quality some.
An image has to be saved as a resource in the content node then only you can create Images on the fly by specifying the width, height, and quality.
Rendition Based: Works for any images in the DAM. URL will be either actual rendition or gives back original image
Renditions are specified based on the containers in the site and created as soon as image is uploaded by the author
Renditions are readily available for the author to view how it looks for smaller dimensions.
Work great on portrait and landscape images.
Takes space, even though for few image, renditions specified in the DAM Update Asset workflow are not needed.
Need to re-run DAM Update Asset workflow if new rendition is needed