Microsoft Dynamics CRM 4.0 install error "The instance name must be the same as computer name."

If you are installing Microsoft Dynamics CRM 4.0 to a computer that you have renamed, this can cause problems depending on when you installed SQL Server 2005. If you installed SQL Server before you renamed the box, you will receive the following error regarding SQL Server 2005 when the installer does a system check:

"The instance name must be the same as computer name."

To fix this problem you need to update the name of the machine in SQL Server by executing the following:

sp_dropserver 'OldMachineName'
GO
sp_addserver 'NewMachineName', local
GO

You will also need to restart the SQL Server service. Please note you can't use this command to change the instance suffixes. For example you can NOT change "serverA\SomeInstance" to "serverA\AnotherInstance", you may only change "serverA\SomeInstance" to "serverB\SomeInstance".

For more information see the following MSDN article: http://msdn.microsoft.com/en-us/library/ms143799.aspx

You may also need to update Reporting Services: http://msdn.microsoft.com/en-us/library/ms345235.aspx

This situation can easily arise if you have a virtual envrionment and are cloning machines.