I know we had to previously make sure FME Server was on the same server as ArcGIS. Is that still the case for new installs on a new server?
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Whatever libraries are required for the FME Desktop workspace to work, will also be required on the FME Server machine where it is intended for that process to run. So if you need to use the Geodatabase (ArcObjects) writer, spatially index a shape file or use the ESRIReprojector for example, in the process that will run on FME Server, you will need the Esri components also on the Server box.