I just tried to upgrade our SEPM server from 11.06 MP3 to 11.7 MP1 and the database upgrade failed.
We are using the embedded database moved to a seperate drive on a Windows 2008 R2 server.
It seems like the update script resets the connection string in registry
[HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\services\ASANYs_sem5\Parameters]
the Parameters value is reset back to default wich expects to find the database under C:\Program Files (x86)\Symantec\Symantec Endpoint Protection Manager\db\
My solution to this was to move the database files back to the default location and run the upgrade again. When the upgrade is complete I moved the database back to the drive where I store the database. Adjust the registry and the ODBC connection with C:\Windows\SysWOW64\odbcad32.exe