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When I install SQL Server 2008 Express in prompts me to create an instance and aborts if I don't. Then I see that information in an entry in Sql Server Configuration Manager on SQL Server Services. What is a SQL Server instance?

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An SQL Server instance is a complete SQL server and you can install many instances on a machine but you can have only 1 default instance.

An SQL Server instance has its own copy of the server files, databases and security credentials.

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Can more than one instance be running at the same time? – J. Pablo Fernández May 24 '09 at 10:53
Yes, more than 1 instance can run at a time. You just need a unique name for each instance that you install (as well as filesystem path) – Wayne May 24 '09 at 10:57
You can even have one instance be SQL 2000 and another 2005; biggest gotcha with multiple instances is memory management, if you use the default settings, all instances will try to claim all memory, it's best to explicitly limit max memory at each instance. – SqlACID May 24 '09 at 11:20
SQL 2000 supports 16 instances. SQL 2005 and SQL 2008 support up to 50 instances per computer. You can run SQL 2000 and SQL 2005 on the same computer, or SQL 2005 and SQL 2008 on the same computer. However you can not run SQL 2000 and SQL 2008 on the same computer. – mrdenny May 25 '09 at 3:16
Be aware that not all SQL Server services are "instance aware" or multi instance. Integration Services, for example, is only installed once per Windows host. These instances include Express instances that might be installed by applications. – Steve Jones May 29 '09 at 20:05

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