My aim to publish a raster layer as an Image Service from our ArcGIS server and consume it in our web application. I exported raster data that was residing on my workstation to our SQL Server from ArcMap (ArcSDE). Subsequently I am working on publishing it directly from the database. However, the last step of the Share As an Image Service process is copying the raster data to our ArcGIS Server. I am unable to find a way to eliminate it, wondering whether or not I could publish an image service from the database without having to create a copy of it in the server?
Storing images in a database stopped being high-tech with the introduction of map caching at ArcGIS 9.2 (9 years ago). Current best practice for serving images is to use image files on disk from a raster dataset (which requires the Image Server extension). Extracting image files from an ArcSDE database should be a last-ditch effort -- far better to use the original archived files as-is.
While it is possible to reference image files on a network share, best practice is generally to have the files local to the server (e.g. fibre-attached device, not SAN). Yes, this uses more storage, but the access performance difference can be significant (benchmark it if necessary).