The rest is being used by the OS and such the Webtop application uses quite a bit by itself.

 

You have around 3.5 or 4GB "Application Storage" which is where the apps are installed by default and which cannot be used for anything else, and 8GB "Internal Storage" which is the normal freely usable memory. The rest is used by the OS and Motorola software as waremaster said.

Short of carrying lots of music and videos around, this should usually be more than enough (unlike manufacturers like HTC who like to put no more than 1.5GB total in their European models), and if it isn't, the Razr (in practice) can deal with memory cards up to 64GB microSDXC.

 

On the one hand I think reserving 8gb for webtop is overkill (and a waste; esp for us who don't use webtop) on the other hand (for me personally) 8gb is plenty for base stuff (applications) and I prefer to put media (songs, movies, pictures) on the sd.

 

It's not even that much; it's only about 4.5GB of memory that's completely taken away from you. The rest of the "limited" 8GB is the Application Storage, and I think that's a good way to make sure you'll hardly have a chance of running out of space for apps, because I suppose filling 3.5GB purely with apps (that you have a use for) is a tough challenge.