Q: What is System Center Orchestrator SMA in System Center 2012 R2?
A: Orchestrator Service Management Automation (SMA) is a new component that has been added in System Center 2012 R2, and although initially it might seem to be an extension to Orchestrator--which in itself is already part of System Center--it's really a completely separate component.
When running the Orchestrator setup routine, you'll find a separate option to install Orchestrator SMA, that allows the installation of the components related to SMA but completely separate from those of regular Orchestrator.
Orchestrator typically enables runbooks to be created that contain activities that perform different actions on systems, and the activities can be expanded through Integration Packs. These runbooks run on runbook servers and Orchestrator provides additionaly capabilities for runbooks to leverage, such as encrypted variables, schedules, counters, and more.
Orchestrator SMA provides a rich environment in which to run Windows PowerShell workflows. Some Orchestrator concepts such as the encrypted variables, counters, schedules, and SMA runbook servers can be used as part of the PowerShell workflows that are run.
The reason for Orchestrator SMA is that the Windows Azure Pack that leverages parts of System Center 2012 heavily utilizes PowerShell workflows, and it uses Orchestrator SMA to do so.
It's also possible for organizations leveraging Windows Azure Pack to integrate their own PowerShell workflows into SMA. PowerShell is the future direction for Microsoft, and with Orchestrator SMA, those PowerShell efforts benefit from the capabilities and scalability (such as multiple SMA runbook servers) formerly possible only with Orchestrator runbooks.
For a great overview of SMA I recommend reading this MSDN blog.