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Do direct connections count against the CONNECTIONS parameter in the server_config table for ArcSDE?
Yes. Application server and direct connections to the database count toward this value, which is set by default to 48 connections in ArcSDE 10 and earlier releases and 64 connections in ArcSDE 10.1 and later releases.
Once the maximum number of connections are in use, the following error is displayed if another connection is attempted:
"Failed to connect to database.
Maximum number of connections to instance exceeded."
To change the value of the CONNECTIONS parameter, use the sdeconfig ArcSDE administration command. In the following example, the value for the CONNECTIONS parameter is changed to 75 in a geodatabase (mygdb) on a SQL Server instance (myinstance)
sdeconfig -o alter -v CONNECTIONS=75 -i sde:sqlserver:myinstance -D mygdb -u sde