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Each product require 20-200MB disk space. But the installation requires a ~1.5GB base disk space regardless of what you install. What does it use that 1.5GB disk space for?

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It would appear that Microsoft is conservative in regards to the amount of disk space and purposely overestimates the amount you'll need. Taken from a Microsoft TechNet Article about the Office 2010 System Requirements underneath What About Disk Space?:

Conservatism. We tend to be overly conservative when drafting hard disk requirements, and we round up to the nearest GB or 0.5 GB. For example, if we measure an application’s footprint to be 1.63 GB, our requirement will be 2.0 GB. If our measurement reads 1.99 GB, we’ll make the system requirement 2.5 GB. Our requirements are larger than the actual disk space usage of the software – and we intentionally oversize them just to be safe.

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So, it uses somewhere between .5 and 1.5 GB of space with nothing installed. What is that space for? –  Kruug Jan 7 '13 at 19:14
    
@Kruug Beyond Microsoft being conservative, the other parts of the above-mentioned article states: "Office-wide Ribbon implementation. In Office 2010, you’ll see the Ribbon in all Office applications. " Some of the actual (and not over-estimated) bulk of Office 2010 comes from the shared components (which includes the suite-wide Ribbon elements). –  Trav Jan 7 '13 at 19:31
    
I assumed something like that, but it still begs the question of why, if nothing is being installed, do the shared components need to be installed? –  Kruug Jan 7 '13 at 19:34

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