Cannot create a new geodatabase on a SQL Server Express Amazon Machine Instance (AMI) from ArcGIS for Server 10.1 SP1 or ArcGIS for Server 10.1 Japanese.
The new geodatabase appears under the Database Server node in ArcCatalog, but when a connection is made to the new geodatabase, the following error is returned:
"Failed to connect to database. Bad login user."
When the connection to the database server is refreshed, the newly created geodatabase no longer appears.
Creating a new geodatabase fails if SQL Server Express is installed as the default instance instead of a named instance.
A default instance is identified as <machine_name>, for example, MyServer or Localhost.
A named instance is identified as <machine_name>\<instance_name>, for example, MyServer\sqlexpress or Localhost\sqlexpress.