Is it fair to assume that I won't be able to configure Esri ArcGIS Python with FME Cloud and would have to deploy FME Server instead?
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Yes, that is correct, as an ArcGIS Server license isn't included in the FME Cloud offering.
I'm just running Pro on the box that the screenshot was from but I suspect installing Pro is not possible?
I'm just running Pro on the box that the screenshot was from but I suspect installing Pro is not possible?
FME Cloud is a hosted service running on Linux, so unfortunately that is not possible.