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A variable used to be synonym for "environment variable". You can use these in a lot of places in a transformation. Most of the time the fields that support it have a "Variable" button next to it.
Environment variables can still be used, but they are no longer the only option you have. You can also set variables only for a certain parent job, grand-parent job or root job.
Variables are accessed using this format:
${VariableName}: Unix style
%%VariableName%% : Windows style
Extra tip: you can set environment variables by defining a properties file in $HOME/.kettle/kettle.properties, using format VARIABLE=a certain value
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