I’m trying to upgrade my SMS 2003 SP2 Central Site to SP3. However, the installation fails with a dialog box stating:

Systems Management Server Setup cannot continue because of the following error: Setup cannot upgrade the SMS database. Contact your SQL administrator

Looking in the C:\SMSSETUP.LOG it reports:

SQL error <[08S01][0][Microsoft][ODBC SQL Server Driver]Communication link failure


In this case SMS and SQL were running on separate physical servers. Looking in SQL Server Management Studio the computer account of the SMS Site Server wasn’t listed under the “Security | Users” node for the SMS Database. First off I needed to add this in the format “<domain>\<SMS_site_server_computer_name>$“.

Second on the “Database User – New” screen make sure you enter “dbo” in the “Default schema” field before clicking “OK“.

I then retried the upgrade and it completed successfully.