vCenter Server requires a database to store and organize server data.
Each vCenter Server instance must have its own database. For environments with up to 20 hosts and 200 virtual machines, you can use the bundled PostgreSQL database that the vCenter Server installer can install and set up for you during the vCenter Server installation. A larger installation requires a supported external database for the size of the environment.
During vCenter Server installation you must select to install the embedded database or point the vCenter Server system to any existing supported database. vCenter Server 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.