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When making a connection to the SQL Server Express instance in ArcCatalog and attempting to create a new geodatabase, the following error is returned:
"Error creating this geodatabase
No ArcSDE server license found."
This error occurs after installing ArcSDE for SQL Server Express (Personal Edition) that is included with the ArcGIS Desktop 10.0 installation media.
This is a known issue with the ArcGIS 10.0 installation of ArcSDE for SQL Server Express (Personal Edition). This error occurs when the software is installed from the setup link on the ArcGIS Desktop installation screen (ESRI.exe application), or by manually executing setup.exe in the ArcSDE_Personal folder.
Esri recommends using this repair utility.
1. Download and run NIM058807_Repair.
2. When this utility opens, select the appropriate instance of SQL Server Express and click OK.
A valid license key that correctly authorizes the installation is written to the registry. It is now possible to create a new geodatabase using the Database Server connection in ArcCatalog.
Instead of installing from the ESRI.exe application or setup.exe in the ArcSDE_Personal folder, install using the ArcSDESetupSqlExpressPersonal.exe in either the 32-bit or 64-bit folder, depending on whether a 32-bit or 64-bit operating system is being used.