You have nothing to gain by making separate installations unless you intend to use these modules in separate places.

Hmm. I sometimes develop in this way. You do get some useful things from this model:

• You can easily separate the test scripts that apply to this particular module from those that apply to another. This allows you to easily run only the relevant tests when testing a module. This can save time and make TDD considerably more pleasant.
• People can work on modules independently from each other.
• It can give you a nice clear separation of unit tests (distributed with module directory) and acceptance tests (distributed with application as a whole).
• Allows you to easily release module updates rather than application updates as appropriate.

There are certainly other ways of getting these benefits, but the CPAN-ish structure gets you a lot without any effort.

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