They differ by the location where the program stores its configuration. “Portable” software saves to the directory where it is executed from. It may be copied to another computer and retain its settings. Other software writes to a directory that is chosen by the operating system for the currently active user. It is compatible with a setup where the installation directory is protected from writing and can be used by multiple user accounts each with its own settings.
Software distributed with an installer may depend on shared components copied to the system directory, it may rely on integration with other software allowing it to call this application in the background, or it may set up hidden copy protection. An installer may be provided for the convenience of novice users who are familiar with following a setup wizard but not with copying files by hand.
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