You can group server instances in the navigation pane tree based on their category or server group. Categories are similar to server groups, but they offer different features:
Categories can organize both server instances and databases, but server groups only organize server instances. In addition, a database does not have to be assigned to the same categories as its parent server instance.
Databases and server instances can be assigned to more than one category. For example, if you have Location and Role categories, a database could be categorized as both North America and Development. Unlike categories, a server instance can only be assigned to one server group. In the previous example, the server instance could only be assigned to a role or location group, but not both.
To change the server instance grouping method
Select View | Group Instances By, and then select Server Group or Categories. If you select Categories, select a category to view in the Category field in the toolbar.
NOTE: You can use categories, if the central repository is configured and selected for use. For more information, see Select a Central Repository.