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You can place the Oracle home directory ($ORACLE_HOME), which contains the Oracle binaries and configuration files, locally on each server's disk. Alternatively, you can place the Oracle home directory on the shared storage. The correct location for Oracle binaries depends on your environment. The following points discuss the advantages of each approach.
$ORACLE_HOME directory on shared disks
When the Oracle Database Server ($ORACLE_HOME) is installed on shared disks, each node in the cluster must have the same mount point directory for the shared file system. Placing Oracle binaries on shared storage simplifies setting up a given node in a cluster to run an instance. Each database service group is self-contained. An instance can be moved to a new node in the cluster that shares the storage.
For example, in a cluster with four nodes, it is possible to have three database instances, or service groups, each at a different version of Oracle. If the Oracle binaries are placed on shared storage, three copies of Oracle, that is, one per version are required on shared storage. By contrast, placing the Oracle binaries on local storage, would require as many as 12 copies of the binaries (three versions on four nodes).
The disadvantage of this approach is that a rolling upgrade of Oracle binaries on shared storage is not possible.
$ORACLE_HOME directory on the local disk
Installing Oracle Database Server ($ORACLE_HOME) on the local disk has the advantage of allowing an upgrade of the Oracle database binaries on an offline node while the database server runs on another node. The database server can later be switched to the upgraded node (provided the database is compatible), permitting a minimum amount of downtime.
The disadvantage of this approach is that with a large number of nodes, it becomes difficult to maintain the various Oracle installations.