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I have Oracle 11g installed on my system and want to install 12c now. Read articles (Oracle docs and general) which suggest that I can do so in different homes. But, when I try to install 12c (12.1.0.1 release 1), it does not allow me to do so as it says "oracle _home (in environment variables) already defined and does not match the path specified (during installation)". A search on this portal gives results that do not answer my query.

What path should I specify for software location (Oracle home) during installation? (It auto reflects the server path of 11g installed) Do I need to manually add this specified path to Oracle_Home path (in addition to the already existing oracle home for 11g) in environment variables for the installation to auto-accept it and allow further installation?

How do I get around the installation?

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Docs don't just "suggest" that you "can" install into a new location. It is required. Two different installations must be in their own ORACLE_HOME directory. And you do not "add" another path/directory to ORACLE_HOME. ORACLE_HOME specifies only one home/directory at a time. To quote from the Installation Guide: (https://docs.oracle.com/database/121/LADBI/inst_task.htm#LADBI7742):

"Do not install Oracle Database 12c software into an existing Oracle home." (emphasis mine).

Also, the installation guide specifically says to unset ORACLE_HOME and several other enviornment variables before launching the OUI.

"If you have had an existing installation on your system, and you are using the same user account to install this installation, then unset the ORACLE_HOME, ORACLE_BASE, ORACLE_SID, TNS_ADMIN environment variables and any other environment variable set for the Oracle installation user that is connected with Oracle software homes." https://docs.oracle.com/database/121/LADBI/usr_grps.htm#LADBI7678

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