Use the Instance Configuration page of the SQL Server Installation Wizard to specify whether to create a default instance or a named instance of SQL Server. If an instance of SQL Server is not already installed, a default instance will be created unless you specify a named instance.
Each instance of SQL Server consists of a distinct set of services that have specific settings for collations and other options The directory structure, registry structure, and service names all reflect the instance name and a specific instance ID created during SQL Server Setup.
An instance is either the default instance or a named instance. The default instance name is MSSQLSERVER; SQLExpress for SQL Server Express. It does not require a client to specify the name of the instance to make a connection. A named instance is determined by the user during Setup. You can install SQL Server as a named instance without installing the default instance first. The default instance could be an installation of SQL Server 2000, SQL Server 2005, or SQL Server 2008. Only one installation of SQL Server, regardless of version, can be the default instance at one time.
SQL Server supports multiple instances of SQL Server on a single server or processor, but only one instance can be the default instance. All others must be named instances. A computer can run multiple instances of SQL Server concurrently, and each instance runs independently of other instances.
For more information, see Maximum Capacity Specifications for SQL Server.
Failover cluster instances only — Specify the SQL Server failover cluster network name. This name identifies the failover cluster instance on the network.
Default or Named instance — Consider the following information when you decide whether to install a default or named instance of SQL Server:
If you plan to install a single instance of SQL Server on a database server, it should be a default instance.
Use a named instance for situations where you plan to have multiple instances on the same computer. A server can host only one default instance.
Any application that installs SQL Server Express should install it as a named instance. This will minimizes conflict when multiple applications are installed on the same computer.
Instance ID - By default, the instance name is used as the Instance ID. This is used to identify installation directories and registry keys for your instance of SQL Server. This is the case for default instances and named instances. For a default instance, the instance name and instance ID would be MSSQLSERVER. To use a non-default instance ID, specify it in the Instance ID field.
Instance ID's that begin with an underscore (_) or that contain the number sign (#) or the dollar sign ($) are not supported.
For more information about directories, file locations, and instance ID naming, see File Locations for Default and Named Instances of SQL Server.
Instance root directory - By default, the instance root directory is C:\Program Files\Microsoft SQL Server\. To specify a non-default root directory, click the Browse button, or provide a path name.
All components of a given instance of SQL Server are managed as a unit. All SQL Server service packs and upgrades will apply to every component of an instance of SQL Server.
All components of SQL Server that share the same instance name must meet the following criteria:
Same language settings
Same clustered state
Reporting Services is not cluster-aware.
Same operating system