If you’ve ever turn on show hidden files in the folder options, you will likely observe sqmdata and sqmnoopt all .sqm files on your root partition usually under the C drive. Although, the file are relatively small but annoying to have a huge list of them on your root directory. So I did a quick Google search, found out that the .sqm files are for Microsoft Live products, so software like Windows Live Messenger (MSN) and other Live packages will create those file. “.sqm” file is stand for Service Quality Monitoring. Its a list of files that collects information and used by Microsoft to help to improve their products, by monitoring the usage of the software. You can stop those files being created.
- Go to Help > Help Improve Windows Live (Hold Alt if you don’t see the tool bar option)
- Click and Choose do not participate
You are done 
This will disable the .sqm file being created, and hopefully you will have a clean root directory.
This will disable the .sqm file being created, and hopefully you will have a clean root directory.