To start an instance, Oracle must read either an initialization parameter file or a server parameter file. These files contain a list of configuration parameters for that instance and database. Oracle traditionally stored initialization parameters in a text initialization parameter file. You can also choose to maintain initialization parameters in a binary server parameter file (SPFILE).
Initialization parameters stored in a server parameter file are persistent, in that any changes made to the parameters while an instance is running can persist across instance shutdown and startup.
Initialization parameters are divided into two groups: basic and advanced. In the majority of cases, it is necessary to set and tune only the basic parameters to get reasonable performance. In rare situations, modification to the advanced parameters may be needed for optimal performance.
Most initialization parameters belong to one of the following groups:
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Parameters that name things, such as files
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Parameters that set limits, such as maximums
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Parameters that affect capacity, such as the size of the SGA, which are called variable parameters
Among other things, the initialization parameters tell Oracle:
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