What does ‘COLLATE SQL_Latin1_General_CP1_CI_AS’ do?

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It sets how the database server sorts (compares pieces of text). in this case:

SQL_Latin1_General_CP1_CI_AS

breaks up into interesting parts:

  1. latin1 makes the server treat strings using charset latin 1, basically ascii
  2. CP1 stands for Code Page 1252
  3. CI case insensitive comparisons so ‘ABC’ would equal ‘abc’
  4. AS accent sensitive, so ‘ü’ does not equal ‘u’

P.S. For more detailed information be sure to read @solomon-rutzky’s answer.

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