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I think one of the best capabilities of ArcGIS desktop 10.1 and 10.2 is Database Connection. Users can connect to every Database servers without using Middleware(ArcSDE) . You can Distribute, manage users and other capabilities.But why ESRI release ArcSDE 10.1 or 10.2 while we can use Database connecion? What are capabilities of ArcSDE VS Database Connection?

Thanks For advance

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I think there is some confusion. ArcSDE did not go anywhere, the difference is now you are doing a direct connect running "ArcSDE" locally on your desktop. ESRI has just removed the need to run ArcSDE as a middleware, but it is still there. There are not in advantages in, my opinion, to run ArcSDE as a middleware unless you have some third party software that requires it or you want to do some administration with desktop through the command line.

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