Merge Module
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A merge module is a special kind of Windows Installer database that contains the components needed to install a discrete software bundle. A merge module cannot be installed alone, but must be merged into a standard Windows Installer installation during the creation of the installation. Typically, a merge module or a collection of merge modules related by dependencies, installs a software product or portion of a product at runtime. The purpose of merge modules is to let you add self-contained software modules to multiple installations.
For example, if there are a number of applications that require a specifically configured component, it would be possible to create a merge module that installs and configures that component. That merge module could then be added to the installation packages of each product that required that particular component. This saves the effort of having to individually add the necessary files, registry entries, and other components to every installation. It also saves time if updates are needed, as instead of updating the installations for all five applications, only the merge module is updated, and the installations only need to be rebuilt.
Some merge modules may be configurable merge modules. Such merge modules contain certain values that can be set to specify how the module behaves in your installation. For example, the author of the configurable merge module may allow attributes to be set on components, enable or disable isolated components, specify a bitmap for a dialog, or specify how a custom action is run. Configurable merge modules are supported only by Windows Installer 2.0 or higher.
There exist a number of pre-created merge modules which install commonly-used Microsoft software packages, such as MDAC, ActiveX controls, MFC, SAPI and DCOM.
[edit] More details from Microsoft's Windows Installer SDK
Merge modules provide a standard method by which developers deliver shared Windows Installer components and setup logic to their applications. Merge modules are used to deliver shared code, files, resources, registry entries, and setup logic to applications as a single compound file. Developers authoring new merge modules or using existing merge modules should follow the standard outlined in this section.
A merge module is similar in structure to a simplified Windows Installer .msi file. However, a merge module cannot be installed alone, it must be merged into an installation package using a merge tool. Developers wanting to use merge modules must obtain one of the freely distributed merge tools, such as Mergemod.dll, or purchase a merge tool from an independent software vendor. Developers can create new merge modules by using many of the same software tools used to create a Windows Installer installation package, such as the database table editor Orca provided with the Windows Installer SDK.
When a merge module is merged into the .msi file of an application, all the information and resources required to install the components delivered by the merge module are incorporated into the application's .msi file. The merge module is then no longer required to install these components and the merge module does not need to be accessible to a user. Because all the information needed to install the components is delivered as a single file, the use of merge modules can eliminate many instances of version conflicts, missing registry entries, and improperly installed files.