A DB2 instance is a logical database manager environment where you catalog databases and set configuration parameters.
If needed you can create more than one instance. You can use multiple instances to do the following:
->Use one instance for a development environment and another instance for a production environment.
->Tune an instance for a particular environment.
->Restrict access to sensitive information.
->Optimize the database manager configuration for each instance.
It should be noted that multiple instances have some minor disadvantages:
->Additional system resources (virtual memory and disk space) are required for each instance.
->More administration is required because of the additional instances to manage.
The instance directory stores all information that pertains to a database instance. You cannot change the location of the instance directory once it is created.
The directory contains:
->The database manager configuration file
->The system database directory
->The node directory
->The node configuration file (db2nodes.cfg)
->Any other files that contain debugging information, such as the exception or register dump