diff --git a/.gitignore b/.gitignore
index d48899072c0..ebad3a75fe5 100644
--- a/.gitignore
+++ b/.gitignore
@@ -9,6 +9,8 @@ target/
 bin/
 test-output/
 maven-eclipse.xml
+instance/
+config/
 
 # Idea #
 ##################
diff --git a/Chefile b/Chefile
index 05fab76e58e..e5a67de8602 100644
--- a/Chefile
+++ b/Chefile
@@ -6,7 +6,7 @@ workspace.commands[0].name="1. Build Che in Che"
 workspace.commands[0].commandLine="mvn clean install -f /projects/che/assembly/assembly-main"
 
 workspace.commands[1].name="2. Run Che in Che"
-workspace.commands[1].commandLine='export CHE_VERSION="nightly" && export CHE_BIN_PATH=$(ls -d /projects/che/assembly/assembly-main/target/eclipse-che-*/eclipse-che-*); sudo docker run --rm -t -v /var/run/docker.sock:/var/run/docker.sock --env CHE_LOCAL_BINARY=${CHE_BIN_PATH/\'/projects/che\'/$(sudo docker inspect --format \'{{ range .Mounts }}{{ if eq .Destination "/projects/che" }}{{ .Source }}{{ end }}{{ end }}\' $(hostname))}  --env CHE_PORT=54321 --env CHE_SERVER_CONTAINER_NAME="che-in-che-server" codenvy/che-launcher:nightly start'
+workspace.commands[1].commandLine='export CHE_VERSION="nightly" && export CHE_BIN_PATH=$(ls -d /projects/che/assembly/assembly-main/target/eclipse-che-*/eclipse-che-*); sudo docker run --rm -t -v /var/run/docker.sock:/var/run/docker.sock --env CHE_ASSEMBY=${CHE_BIN_PATH/\'/projects/che\'/$(sudo docker inspect --format \'{{ range .Mounts }}{{ if eq .Destination "/projects/che" }}{{ .Source }}{{ end }}{{ end }}\' $(hostname))}  --env CHE_PORT=54321 --env CHE_SERVER_CONTAINER_NAME="che-in-che-server" codenvy/che-launcher:nightly start'
 workspace.commands[1].attributes={
 "previewUrl": "http://localhost:54321"
 }
diff --git a/assembly/assembly-main/src/assembly/bin/che.sh b/assembly/assembly-main/src/assembly/bin/che.sh
index cc10d77c1ca..c48cdc885f9 100644
--- a/assembly/assembly-main/src/assembly/bin/che.sh
+++ b/assembly/assembly-main/src/assembly/bin/che.sh
@@ -271,7 +271,6 @@ start_che_server () {
 stop_che_server () {
   echo -e "Stopping Che server running on localhost:${CHE_PORT}"
   call_catalina >/dev/null 2>&1
-  return 1;
 }
 
 call_catalina () {
diff --git a/assembly/assembly-main/src/assembly/bin/docker.sh b/assembly/assembly-main/src/assembly/bin/docker.sh
index 431687bef4e..f50492b5dc3 100644
--- a/assembly/assembly-main/src/assembly/bin/docker.sh
+++ b/assembly/assembly-main/src/assembly/bin/docker.sh
@@ -17,12 +17,13 @@ pid=0
 check_docker() {
   if [ ! -S /var/run/docker.sock ]; then
     echo "Docker socket (/var/run/docker.sock) hasn't been mounted. Verify your \"docker run\" syntax."
-    return 1;
+    return 2;
   fi
 
   if ! docker ps > /dev/null 2>&1; then
     output=$(docker ps)
-    error_exit "Error when running \"docker ps\": ${output}"
+    echo "Error when running \"docker ps\": ${output}"
+    return 2;
   fi
 }
 
@@ -51,9 +52,17 @@ init() {
   export CHE_IN_CONTAINER="true"
   export CHE_SKIP_JAVA_VERSION_CHECK="true"
 
+  if [ -f "/assembly/bin/che.sh" ]; then
+    echo "Found custom assembly..."
+    export CHE_HOME="/assembly"
+  else
+    echo "Using embedded assembly..."
+    export CHE_HOME="/home/user/che"
+  fi
+
   ### Are we using the included assembly or did user provide their own?
-  DEFAULT_CHE_HOME="/home/user/che"
-  export CHE_HOME=${CHE_ASSEMBLY:-${DEFAULT_CHE_HOME}}
+#  DEFAULT_CHE_HOME="/assembly"
+#  export CHE_HOME=${CHE_ASSEMBLY:-${DEFAULT_CHE_HOME}}
 
   if [ ! -f $CHE_HOME/bin/che.sh ]; then
     echo "!!!"
@@ -64,27 +73,36 @@ init() {
   fi
 
   ### We need to discover the host mount provided by the user for `/data`
-  DEFAULT_CHE_DATA="/data"
-  export CHE_DATA=${CHE_DATA:-${DEFAULT_CHE_DATA}}
+ # DEFAULT_CHE_DATA="/data"
+ # export CHE_DATA=${CHE_DATA:-${DEFAULT_CHE_DATA}}
+  export CHE_DATA="/data"
   CHE_DATA_HOST=$(get_che_data_from_host)
 
   ### Are we going to use the embedded che.properties or one provided by user?`
   ### CHE_LOCAL_CONF_DIR is internal Che variable that sets where to load
-  DEFAULT_CHE_CONF_DIR="${CHE_DATA}/conf"
-  export CHE_LOCAL_CONF_DIR=${CHE_LOCAL_CONF_DIR:-${DEFAULT_CHE_CONF_DIR}}
+#  DEFAULT_CHE_CONF_DIR="/conf"
+#  export CHE_LOCAL_CONF_DIR="${CHE_DATA}/conf"
+#  export CHE_LOCAL_CONF_DIR=${CHE_LOCAL_CONF_DIR:-${DEFAULT_CHE_CONF_DIR}}
 
-  if [ ! -f "${CHE_LOCAL_CONF_DIR}/che.properties" ]; then
-    echo "Did not discover che.properties file. Copying properties template to ${CHE_DATA_HOST}/conf."
+  if [ -f "/conf/che.properties" ]; then
+    echo "Found custom che.properties..."
+    export CHE_LOCAL_CONF_DIR="/conf"
+  else
+    echo "Using embedded che.properties... Copying template to ${CHE_DATA_HOST}/conf."
     mkdir -p /data/conf
     cp -rf "${CHE_HOME}/conf/che.properties" /data/conf/che.properties
+    export CHE_LOCAL_CONF_DIR="/data/conf"
   fi
 
   # Update the provided che.properties with the location of the /data mounts
-  sed -i "/che.workspace.storage/c\che.workspace.storage=${CHE_DATA_HOST}/workspaces" $CHE_LOCAL_CONF_DIR/che.properties
-  sed -i "/che.conf.storage/c\che.conf.storage=/data/storage" $CHE_LOCAL_CONF_DIR/che.properties
-  sed -i "/machine.server.ext.archive/c\machine.server.ext.archive=${CHE_DATA_HOST}/lib/ws-agent.tar.gz" $CHE_LOCAL_CONF_DIR/che.properties
-  sed -i "/machine.server.terminal.path_to_archive.linux_amd64/c\machine.server.terminal.path_to_archive.linux_amd64=${CHE_DATA_HOST}/lib/linux_amd64/terminal" $CHE_LOCAL_CONF_DIR/che.properties
-  sed -i "/machine.server.terminal.path_to_archive.linux_arm7/c\machine.server.terminal.path_to_archive.linux_arm7=${CHE_DATA_HOST}/lib/linux_arm7/terminal" $CHE_LOCAL_CONF_DIR/che.properties
+  sed -i "/che.workspace.storage=/c\che.workspace.storage=/data/workspaces" $CHE_LOCAL_CONF_DIR/che.properties
+  sed -i "/che.database=/c\che.database=/data/storage" $CHE_LOCAL_CONF_DIR/che.properties
+  sed -i "/che.template.storage=/c\che.template.storage=/data/templates" $CHE_LOCAL_CONF_DIR/che.properties
+  sed -i "/che.stacks.storage=/c\che.stacks.storage=/data/stacks/stacks.json" $CHE_LOCAL_CONF_DIR/che.properties
+  sed -i "/che.stacks.images=/c\che.stacks.images=/data/stacks/images" $CHE_LOCAL_CONF_DIR/che.properties
+  sed -i "/che.workspace.agent.dev=/c\che.workspace.agent.dev=${CHE_DATA_HOST}/lib/ws-agent.tar.gz" $CHE_LOCAL_CONF_DIR/che.properties
+  sed -i "/che.workspace.terminal_linux_amd64=/c\che.workspace.terminal_linux_amd64=${CHE_DATA_HOST}/lib/linux_amd64/terminal" $CHE_LOCAL_CONF_DIR/che.properties
+  sed -i "/che.workspace.terminal_linux_arm7=/c\che.workspace.terminal_linux_arm7=${CHE_DATA_HOST}/lib/linux_arm7/terminal" $CHE_LOCAL_CONF_DIR/che.properties
 
   ### If this container is inside of a VM like boot2docker, then additional internal mods required
   DEFAULT_CHE_IN_VM=$(is_in_vm)
@@ -109,8 +127,20 @@ init() {
 
   # Move files from /lib to /lib-copy.  This puts files onto the host.
   rm -rf ${CHE_DATA}/lib/*
-  mkdir -p ${CHE_DATA}/lib
-  cp -rf ${CHE_HOME}/lib/* ${CHE_DATA}/lib
+  mkdir -p ${CHE_DATA}/lib  
+  cp -rf ${CHE_HOME}/lib/* "${CHE_DATA}"/lib
+
+  if [[ ! -f "${CHE_DATA}"/stacks/stacks.json ]];then
+    rm -rf "${CHE_DATA}"/stacks/*
+    mkdir -p "${CHE_DATA}"/stacks
+    cp -rf "${CHE_HOME}"/stacks/* "${CHE_DATA}"/stacks
+  fi
+
+  if [[ ! -f "${CHE_DATA}"/templates/samples.json ]];then
+    rm -rf "${CHE_DATA}"/templates/*
+    mkdir -p "${CHE_DATA}"/templates
+    cp -rf "${CHE_HOME}"/templates/* "${CHE_DATA}"/templates
+  fi
 
   # A che property, which names the Docker network used for che + ws to communicate
   export JAVA_OPTS="${JAVA_OPTS} -Dche.docker.network=bridge"
@@ -212,6 +242,7 @@ responsible_shutdown() {
   echo ""
   echo "Received SIGTERM"
   "${CHE_HOME}"/bin/che.sh stop
+  exit;
 }
 
 # setup handlers
diff --git a/assembly/assembly-main/src/assembly/stack/che-in-che.json b/assembly/assembly-main/src/assembly/stack/che-in-che.json
index 194a2d67037..3ecd7345f11 100644
--- a/assembly/assembly-main/src/assembly/stack/che-in-che.json
+++ b/assembly/assembly-main/src/assembly/stack/che-in-che.json
@@ -65,7 +65,7 @@
         "type": "custom"
       },
       {
-        "commandLine": "export CHE_BIN_PATH=$(ls -d /projects/che/assembly/assembly-main/target/eclipse-che-*/eclipse-che-*); sudo docker run -t -v /var/run/docker.sock:/var/run/docker.sock --env CHE_LOCAL_BINARY=${CHE_BIN_PATH//projects/'home/user/che/workspaces/che'} --env CHE_HOST_IP=$HOST_IP --env CHE_PORT=54321 codenvy/che-launcher start",
+        "commandLine": "export CHE_BIN_PATH=$(ls -d /projects/che/assembly/assembly-main/target/eclipse-che-*/eclipse-che-*); sudo docker run -t -v /var/run/docker.sock:/var/run/docker.sock --env CHE_ASSEMBLY=${CHE_BIN_PATH//projects/'home/user/che/workspaces/che'} --env CHE_HOST_IP=$HOST_IP --env CHE_PORT=54321 codenvy/che-launcher start",
         "name": "3. Run Che in Che",
         "type": "custom",
         "attributes": {
diff --git a/cli.sh b/cli.sh
index dcc054cb61e..663e4c778a0 100755
--- a/cli.sh
+++ b/cli.sh
@@ -24,7 +24,7 @@ init_global_variables() {
   DEFAULT_CHE_CLI_ACTION="help"
   DEFAULT_IS_INTERACTIVE="true"
   DEFAULT_IS_PSEUDO_TTY="true"
-  DEFAULT_CHE_DATA_FOLDER="/home/user/che"
+  DEFAULT_CHE_DATA="/home/user/che"
 
   CHE_PRODUCT_NAME=${CHE_PRODUCT_NAME:-${DEFAULT_CHE_PRODUCT_NAME}}
   CHE_LAUNCHER_IMAGE_NAME=${CHE_LAUNCHER_IMAGE_NAME:-${DEFAULT_CHE_LAUNCHER_IMAGE_NAME}}
@@ -40,7 +40,7 @@ init_global_variables() {
   CHE_CLI_ACTION=${CHE_CLI_ACTION:-${DEFAULT_CHE_CLI_ACTION}}
   CHE_IS_INTERACTIVE=${CHE_IS_INTERACTIVE:-${DEFAULT_IS_INTERACTIVE}}
   CHE_IS_PSEUDO_TTY=${CHE_IS_PSEUDO_TTY:-${DEFAULT_IS_PSEUDO_TTY}}
-  CHE_DATA_FOLDER=${CHE_DATA_FOLDER:-${DEFAULT_CHE_DATA_FOLDER}}
+  CHE_DATA=${CHE_DATA:-${DEFAULT_CHE_DATA}}
 
   GLOBAL_NAME_MAP=$(docker info | grep "Name:" | cut -d" " -f2)
   GLOBAL_HOST_ARCH=$(docker version --format {{.Client}} | cut -d" " -f5)
@@ -48,9 +48,9 @@ init_global_variables() {
   GLOBAL_GET_DOCKER_HOST_IP=$(get_docker_host_ip)
 
   if is_boot2docker && has_docker_for_windows_client; then
-    if [[ "${CHE_DATA_FOLDER,,}" != *"${USERPROFILE,,}"* ]]; then
-      CHE_DATA_FOLDER=$(get_mount_path "${USERPROFILE}/.${CHE_MINI_PRODUCT_NAME}/")
-      warning "Boot2docker for Windows - CHE_DATA_FOLDER set to $CHE_DATA_FOLDER"   
+    if [[ "${CHE_DATA,,}" != *"${USERPROFILE,,}"* ]]; then
+      CHE_DATA=$(get_mount_path "${USERPROFILE}/.${CHE_MINI_PRODUCT_NAME}/")
+      warning "Boot2docker for Windows - CHE_DATA set to $CHE_DATA"
     fi
   fi
 
@@ -88,12 +88,12 @@ Variables:
     CHE_VERSION                        Version of Che to run
     CHE_PORT                           External port of Che server
     CHE_HOST_IP                        IP address Che server binds to - must set for external users
-    CHE_DATA_FOLDER                    Where workspaces and Che prefs are stored
+    CHE_DATA                           Where workspaces and Che prefs are stored
     CHE_HOSTNAME                       External hostname of Che server
-    CHE_CONF_FOLDER                    Folder for custom che.properties file
+    CHE_CONF                           Folder for custom che.properties file
     CHE_RESTART_POLICY                 Che server Docker restart policy if container exited
     CHE_USER                           User ID of the Che server inside its container
-    CHE_LOCAL_BINARY                   Path to a Che assembly to use instead of binary in container
+    CHE_ASSEMBLY                       Path to a Che assembly to use instead of binary in container
     CHE_LOG_LEVEL                      Logging level for Che server - either debug or info
     CHE_EXTRA_VOLUME_MOUNT             Folders to mount from host into Che workspaces
     CHE_PROPERTY_<>                    One time use properties passed to Che - see docs
@@ -242,15 +242,15 @@ docker_run_with_interactive() {
 
 docker_run_with_che_properties() {
   debug $FUNCNAME
-  if [ ! -z ${CHE_CONF_FOLDER+x} ]; then
+  if [ ! -z ${CHE_CONF+x} ]; then
 
     # Configuration directory set by user - this has precedence.
-    docker_run_with_interactive -e "CHE_CONF_FOLDER=${CHE_CONF_FOLDER}" "$@"
+    docker_run_with_interactive -e "CHE_CONF=${CHE_CONF}" "$@"
   else 
     if has_che_properties; then
       # No user configuration directory, but CHE_PROPERTY_ values set
       generate_temporary_che_properties_file
-      docker_run_with_interactive -e "CHE_CONF_FOLDER=$(get_mount_path ~/.${CHE_MINI_PRODUCT_NAME}/conf)" "$@"
+      docker_run_with_interactive -e "CHE_CONF=$(get_mount_path ~/.${CHE_MINI_PRODUCT_NAME}/conf)" "$@"
       rm -rf ~/."${CHE_MINI_PRODUCT_NAME}"/conf/che.properties > /dev/null
     else
       docker_run_with_interactive "$@"
@@ -457,7 +457,7 @@ get_list_of_che_system_environment_variables() {
     echo "CHE_VERSION=${CHE_VERSION}" >> "${TMP_FILE}"
     echo "CHE_CLI_INFO=${CHE_CLI_INFO}" >> "${TMP_FILE}"
     echo "CHE_CLI_DEBUG=${CHE_CLI_DEBUG}" >> "${TMP_FILE}"
-    echo "CHE_DATA_FOLDER=${CHE_DATA_FOLDER}" >> "${TMP_FILE}"
+    echo "CHE_DATA=${CHE_DATA}" >> "${TMP_FILE}"
 
     CHE_VARIABLES=$(env | grep CHE_)
 
diff --git a/samples/sample-plugin-actions/README.md b/samples/sample-plugin-actions/README.md
index a89bff2ed43..a883d1e571c 100644
--- a/samples/sample-plugin-actions/README.md
+++ b/samples/sample-plugin-actions/README.md
@@ -54,7 +54,7 @@ mvn clean install
 ```Shell
 # Start Che using the CLI with your new assembly
 # Replace <version> with the actual directory name
-export CHE_LOCAL_BINARY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
+export CHE_ASSEMBLY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
 che start
 ```
 
diff --git a/samples/sample-plugin-embedjs/README.md b/samples/sample-plugin-embedjs/README.md
index dba6fb7d9e6..79c05f03874 100644
--- a/samples/sample-plugin-embedjs/README.md
+++ b/samples/sample-plugin-embedjs/README.md
@@ -55,7 +55,7 @@ mvn clean install
 ```Shell
 # Start Che using the CLI with your new assembly
 # Replace <version> with the actual directory name
-export CHE_LOCAL_BINARY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
+export CHE_ASSEMBLY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
 che start
 ```
 
diff --git a/samples/sample-plugin-filetype/README.md b/samples/sample-plugin-filetype/README.md
index 5cd10146377..b20dcdbd739 100644
--- a/samples/sample-plugin-filetype/README.md
+++ b/samples/sample-plugin-filetype/README.md
@@ -52,7 +52,7 @@ mvn clean install
 ```Shell
 # Start Che using the CLI with your new assembly
 # Replace <version> with the actual directory name
-export CHE_LOCAL_BINARY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
+export CHE_ASSEMBLY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
 che start
 ```
 
diff --git a/samples/sample-plugin-json/README.md b/samples/sample-plugin-json/README.md
index f3bc46b3587..616398cfc5d 100644
--- a/samples/sample-plugin-json/README.md
+++ b/samples/sample-plugin-json/README.md
@@ -91,7 +91,7 @@ mvn clean install
 ```Shell
 # Start Che using the CLI with your new assembly
 # Replace <version> with the actual directory name
-export CHE_LOCAL_BINARY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
+export CHE_ASSEMBLY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
 che start
 ```
 
diff --git a/samples/sample-plugin-nativeaccess/README.md b/samples/sample-plugin-nativeaccess/README.md
index 17978721afe..3798dae2acf 100644
--- a/samples/sample-plugin-nativeaccess/README.md
+++ b/samples/sample-plugin-nativeaccess/README.md
@@ -57,7 +57,7 @@ mvn clean install
 ```Shell
 # Start Che using the CLI with your new assembly
 # Replace <version> with the actual directory name
-export CHE_LOCAL_BINARY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
+export CHE_ASSEMBLY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
 che start
 ```
 
diff --git a/samples/sample-plugin-parts/README.md b/samples/sample-plugin-parts/README.md
index 30670ab9a73..1eb8face69c 100644
--- a/samples/sample-plugin-parts/README.md
+++ b/samples/sample-plugin-parts/README.md
@@ -55,7 +55,7 @@ mvn clean install
 ```Shell
 # Start Che using the CLI with your new assembly
 # Replace <version> with the actual directory name
-export CHE_LOCAL_BINARY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
+export CHE_ASSEMBLY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
 che start
 ```
 
diff --git a/samples/sample-plugin-serverservice/README.md b/samples/sample-plugin-serverservice/README.md
index ed4fbf027d3..85755a1201a 100644
--- a/samples/sample-plugin-serverservice/README.md
+++ b/samples/sample-plugin-serverservice/README.md
@@ -74,7 +74,7 @@ mvn clean install
 ```Shell
 # Start Che using the CLI with your new assembly
 # Replace <version> with the actual directory name
-export CHE_LOCAL_BINARY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
+export CHE_ASSEMBLY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
 che start
 ```
 
diff --git a/samples/sample-plugin-wizard/README.md b/samples/sample-plugin-wizard/README.md
index 274659fc816..1883d0637fd 100644
--- a/samples/sample-plugin-wizard/README.md
+++ b/samples/sample-plugin-wizard/README.md
@@ -140,7 +140,7 @@ mvn clean install
 ```Shell
 # Start Che using the CLI with your new assembly
 # Replace <version> with the actual directory name
-export CHE_LOCAL_BINARY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
+export CHE_ASSEMBLY=path_to_che_sources/assembly/assembly-main/target/eclipse-che-<version>/eclipse-che-<version>
 che start
 ```