Both vCenter Server and the virtual appliance require a database to store and organize server data and each vCenter Server instance must have its own database. vCenter Server 6.5 comes with a bundled PostgreSQL database that can be used if your environment has upto 20 hosts and 200 VM; for larger environments, you need an external supported database. vCenter Server 6.5 Windows-based supports Microsoft SQL Server and Oracle databases, while for the vCSA, Oracle is the only possible option.

The following table shows the supported databases in vCenter Server 6.5 Update 1 Windows version:

For an updated list of supported databases, refer to the VMware Product Interoperability Matrices from VMware's website at the URL https://www.vmware.com/resources/compatibility/sim/interop_matrix.php.

Which database server type should be used for vCenter Server? Microsoft SQL Server and Oracle are both good options for vCenter Server and the choice is often driven by the platform and knowledge an organization already has. If you have an environment where Microsoft products are predominant and supported by a special contract agreement, the choice will likely be Microsoft SQL Server. If Oracle is already used in an organization, logic suggests going ahead with Oracle database.

Once you have chosen the supported database type to use with your vCenter Server, make sure you understand configuration requirements and setup to avoid problems. During the installation procedure, you must specify whether the system points to an external database or to install the embedded database, therefore the size of your environment plays an important role in this decision.

For small environments, you can also consider the use of Microsoft SQL 2016 Express Edition installed on the same server as the vCenter Server to save a Windows license and take advantage of the SQL Server knowledge you may already have. As soon as your environment grows, you can always upgrade your SQL Express Server to a full Standard or Enterprise edition at a later time.

Although Microsoft officially supports a SQL Server upgrade, I always prefer to build a fresh SQL Server installation and then migrate the vCenter Server database later on. You can find a complete vCenter Server database migration procedure in the VMware's KB 1028601—Migrating the vCenter Server database from SQL Express to full SQL Server at https://kb.vmware.com/kb/1028601.

If an external database will be used for your vCenter Server deployment, the database must be configured accordingly to work with vCenter Server and the external database can be configured manually or by using a script. Let's walk-through the setup of the external database SQL Server.