If you are not using these third-party programs, then it may not be mandatory for users to set up JAVA_Home in your system. In simple words, it makes easy for the programs to locate the directory executable like javac in the computer. These third-party programs make use of the environment variables that point to the directory of JDK or JRE. Basically, JAVA_Home is simply an exemplary used by Java-based programs like Apache Tomcat and other app server tools to find where Java is placed in the system. To be precise, say if you have installed Java in the path C:\Program Files\Java\jdk1.8.0_121 on your computer, then your Java_Home is C:\Program Files\Java\jdk1.8.0_121.
JAVA_HOME is an environment variable which addresses to the directory where Java Runtime Environment or Java Development Kit is installed in the system.
In Unix terminology, an Environment variable is a string that holds information such as drive name, pathname, filename, etc.
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