This is a brand new VM. I installed Server 2012 R2 and patched it up.
I joined it to the domain.
I installed SQL 2012 default install with Windows authentication.
I added the WSUS role, unchecked WID and checked Database.
Now I am at the config screen.
It reads Complete WSUS Installation. For DB instance, I have wsus\updates. Store locally is checked, and my path to content directory is e:\wsusupdates.
When I click run, I get: Fatal Error: a network related or instance specific error occurred while establishing a connection to SQL server. The server was not found or not accessible. Verify that the instance name is correct and that the SQL server is configured to allow remote connections. (provider SQL network interfaces, error 26 - error locating server/instance specified.