The primary reason to use a user-specified account is to enable the use of Windows authentication for SQL Server. We can basically create a service account and make it admin of the box than using system account. System account has much more privileges than needed for vCenter
If you choose this option:
The user-specified account must be an Administrator on the local machine and act as part of the operating system and login as a service rights.
You must specify the account name as DomainName\Username in the vCenter Server install wizard.
You must configure the SQL Server database to allow the domain account access to SQL Server