Side-by-side Upgrade: The source server and the target server are installed on the same machine , but under different install locations. You can choose to perform this type of upgrade if you wish to have the configuration corresponding to these installations on the same machine in different locations.
In-place Upgrade: The target server is installed in the same installation location as the source server. You can choose to perform this type of upgrade if you wish to install the configuration (that is, the domains ) in the same location as before. In this scenario, you install the binaries in the same location as the existing binaries using the installer. After installation, if you select the Upgrade checkbox during installation, the installer invokes the upgrade tool , pre-populating it with the source domains directory and target server directory. In this type of upgrade, you provide the source domains root and all the domains under this domains root are upgraded. If you have created multiple domains roots that are customized, you need to specify each of these domains root for upgrading the domains under them.