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I have my desktop set up with a small drive C:. I have only windows installed on that. I have a large drive D:. Whenever I install software, it usually wants to install itself in C:/program files/.
I just change the C: to a D: and install the program in a folder named program files on my D: drive. That way, if I ever have a problem, in the worst case scerario, I can format or replace C: and still have all my data and settings on D:. I would still have to reinstall the software, but I'd have all my data and setings after the reinstall.
You can do the same thing with an extenal drive, but you won't be able to take that drive to another computer and run the programs without reinstalling them on that machine. The system information, which includes what programs are installed, is on drive C:
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