Location of the $ORACLE_HOME

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

You can install the Oracle Database Server ($ORACLE_HOME) on shared disks. Each node in the cluster must have the same mount point directory for the shared file system. Placing the 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, you can have three database instances or service groups, each at a different Oracle version. 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 local disks

You can install the Oracle Database Server ($ORACLE_HOME) on the local disk. The advantage is that you can upgrade 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.

If you want to use Oracle ASM, then you must place the Oracle home directory only on the local disks of each node. You can install Oracle ASM on the same Oracle home as Oracle Database, or you can install Oracle ASM on a different Oracle home directory.

See Oracle documentation.