Message "Failed to create Java Virtual Machine" after starting Design Studio 1.2 SP1

Hi experts,
after I installed the SP1 of Design Studio 1.2 I become the Message "Failed to create java virtual machine" and I´m not able to start the Design Studio.
My java version is 1.7
My SapDesignStudio.ini File (C:\Program Files\SAP BusinessObjects\Design Studio) looks like as follow:
-startup
plugins/org.eclipse.equinox.launcher_1.3.0.v20130327-1440.jar
--launcher.library
plugins/org.eclipse.equinox.launcher.win32.win32.x86_1.1.200.v20130521-0416
-name
SAP
BusinessObjects
Design
Studio
-vmargs
-Xmx1024m
-Xms256m
-XX:PermSize=32m
-XX:MaxPermSize=512m
-XX:+HeapDumpOnOutOfMemoryError
-Dfile.encoding=UTF-8
-Dosgi.requiredJavaVersion=1.6
-Djava.net.preferIPv4Stack=true
-Djdk.xml.entityExpansionLimit=0
-Djavax.net.ssl.trustStoreProvider=SunMSCAPI
-Djavax.net.ssl.trustStoreType=Windows-ROOT
-Dorg.osgi.framework.os.name=win32
Any ideas or experiences?
Many thanks and regards,
Michael

Hello Max,
many thanks for your reply and your in my case absolutely correct answer!
In respect to your solution proposal I have renamed my Analysis-workspace folder to "Analysis-workspace-V0"
After I have started the Design Studio 1.2 SP1 a new Analysis workspace folder was created with the typical standard name "Analysis-workspace"
So I have my old Design Studio Application and an new empty Analysis folder.
By the way, in my case in addition to the folder rename it was necessary to change the -Xmx Value (SapDesignStudio.ini File) a little bit lower as in standard (in the DS1.2 SP1 setting) 1024m. To become not the Message "Failed to create Java Virtual Machine" I have changed the -Xmx Value from 1024m to 512m.
Now I´m able to start the Design Studio 1.2 SP1 as expected without Message and without breaks down after 5-6 seconds during the startup.
Thanks again!
Best regards,
Michael

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FYI: the images below reflect the sequence of images produced during the installation.
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Message was edited by: Jim Cleek
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