Microsoft made a third type of template, called the Web Template. This was an evolution on Site Definitions but also took the better parts from Site Templates. A Web Template was a single XML file that only contained the deltas (changes) from a Site Definition without the need to first create a custom Site Definition. A developer could then have a peek at all the available Site Definitions as they were on the disk of the SharePoint server, figure out which was the best base template for the intended need, and provides a simple XML file that would provide the instruction set for a custom Web Template. This template would then show on the template selection list upon creating a new SharePoint site (or site collection, for that matter), and would not differ for the end user but, at the same time, could provide additional or customized functionality from the original Site Definition. The XML file for the Web Template could also be packaged in a manageable package and distributed as fit.
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