Historically, System Center products have been tested and supported with only the SQL_Latin1_General_CP1_CI_AS collation. It is the default collation when you install SQL Server on an EN-US Windows Server. When you install SQL on all other languages of the Windows OS the collation default will be something different, typically a Windows collation. The SQL Server collations are no longer being updated and will eventually be phased out in favor of the Windows collations. Therefore, the SQL_Latin1_General_CP1_CI_AS collation doesn’t have some of the latest Unicode characters in its codepage which can cause some problems for those languages which have recently added characters to Unicode. Historically this has been a minimal to non-existent issue. With the introduction of Service Manager to the System Center suite we had our first component that has (a) a full-text searchable knowledge base and (b) a user base that included not just IT people but really the entire organization. The result is that data is stored in newer Unicode characters more often. We started hitting search and sort issues with customers that were using the SQL_Latin1_General_CP1_CI_AS collation during the beta testing of Service Manager 2012 because they were storing some of the newer Unicode characters in the database that weren’t in the SQL_Latin1_General_CP1_CI_AS collation codepage.
The SQL Server team advised us that we should start switching to the Windows collations to minimize these issues from happening. That is why when you are installing SCSM on a SQL Server that is using the SQL_Latin1_General_CP1_CI_AS collation you will see this warning message:
You can bypass this warning message and continue to install using the SQL_Latin1_General_CP1_CI_AS. Further, the SQL_Latin1_General_CP1_CI_AS collation was not listed as a supported collation on the Language Support for System Center 2012 – Service Manager page on the TechNet Library. The required collation for SCSM per the documentation currently is Latin1_General_100_CI_AS (note the 100).
Because all other System Center components (except SCOM which can also be installed on a few other additional collations – more on that in a minute) are required to be installed on SQL_Latin1_General_CP1_CI_AS, most people thought they would need a dedicated SQL Server instance for SCSM. We would generally recommend having a separate instance of SQL Server for running SCSM for performance and scalability reasons, but understand that there are probably plenty of cases where it makes sense to collocate SCSM and other System Center components on a single SQL Server instance.