vCenter Server and vSphere Update Manager require databases to store and organize server data.
Each vCenter Server instance must have its own database. For small installations (up to 5 hosts and 50 virtual machines), you can use the bundled Microsoft SQL Server 2008 Express database, which you can choose to have the vCenter Server installer create during the vCenter Server installation. Larger installations require a supported database, prepared as described in the subtopics of this section.
vCenter Server instances cannot share the same database schema. Multiple vCenter Server databases can reside on the same database server, or they can be separated across multiple database servers. For Oracle databases, which have the concept of schema objects, you can run multiple vCenter Server instances in a single database server if you have a different schema owner for each vCenter Server instance. You can also use a dedicated Oracle database server for each vCenter Server instance.
You do not need to install a new database server for the vCenter Server installation to work. During vCenter Server installation, you can point the vCenter Server system to any existing supported database. vCenter Server supports Oracle and Microsoft SQL Server databases. Update Manager supports Oracle and Microsoft SQL Server databases. For information about supported database server versions, see the VMware Product Interoperability Matrix at http://www.vmware.com/resources/compatibility/sim/interop_matrix.php.
If you have a VirtualCenter database that you want to preserve, do not perform a fresh installation of vCenter Server. See the vSphere Upgrade documentation.
VMware recommends using separate databases for vCenter Server and Update Manager. For a small deployments, a separate database for Update Manager might not be necessary.