Databases for hosting a VMware environment.

SQL Express 2008+
-limited to use a single cpu & 1gb ram (aka performance issues may occur)
-10gb database limit size; a ceiling may be hit, but thus far I cannot find any sizing guides from VMware
-VMware recommend maximum for this is 5 ESXi hosts and/or 50 VM’s

Work Abounds:
Option A:
-Install vCenter on standalone server with SQL Express
-VMware Update Manager, install it on vCenter or break out to separate server with separate SQL Express
-Install VMware View Composer on a standalone server with SQL Express
The idea being that  two or three different SQL Express installs to spread the load around.  Hopefully that 10gb size limit would not be reached.

Option B:
-Use vCenter Virtual Appliance: VMware says it is compatible, it supports 100 hosts & 3000 VMs.  There might be issues in upgrading infrastructure components down the road, IE will VCA be compatible w/ View Horizon 6.0?  And if not will the upgrade of VCA be straight forward and not a rip & replace?  This option saves a Windows license, saves a from the 10gb database limit, saves from not having to purchase a full copy of SQL.  This approach is also somewhat new territory, and hasn’t been widely implemented.  Lastly Update Manger does not function in VCA, the method is to install it on another Windows server, which again needs to talk to a database either SQL or SQL Express. 

Option C:
-Spend money!  Buy SQL standard and another Windows License.   Be sure to limit SQL to not use ALL of the ram and CPU, also set the recovery mode to simplified data recovery, unless one wants to deal with all the SQL log files.