It needs to phone home, so in that sense, it needs online connectivity. So you can't install it on a PC that can't connect to the internet, but as far as I'm aware, it's possible to use it for extended periods of time (I don't know what the limit would be) without access to the internet. If my internet dies for a period of time, I can still use GMS (in fact, it might be some of my most productive periods). So you can use it without internet access for a period, just not without internet access indefinitely.