We are using ArcGIS for Desktop 10.1 and we want to create a geodatabase on a SQL Server Express. We used the setup supplied with the ArcGIS 10.1 DVD. We created a SQL Server (2008 R2 Express edition) and enabled it to store geodatabases, and added this server to Database Servers in ArcCatalog. But when we want to create a new geodatabase on this server it gives an error and says "Error creating this geodatabase Operation Failed". I found the log file in the temp folder (sde_setup.log), and there is an error in creating STATE_LINEAGES table and an error code of -38. Every table before this created succesfully. I couldn't find any information about this error on the internet. Log file and screen capture of error attached to this post. Waiting for your response.
Can you check this one:
Start ArcMap, open the Catalog window, then expand the Database Servers folder in the Catalog tree.
By any chance, is your Sql Server instance set to a collation of either Azeri_Latin_100_CI_AS or Azeri_Cyrillic_100_CI_AS?
Beginning with ArcSDE 9.2, case sensitive collation is not supported at SQL Server instance and database level, which means the database collation must be case insensitive.
What is the name you are using for creating the geodatabase?