With the help of Novell Support, my problem has been resolved.

It turned out to be an incomplete .iso file. I used the SFTP function within the WinSCP program (Windows) to transfer the SLES 12 SP2 .iso file to /tmp on my SMT server (this is where I host the .iso via NFS). WinSCP did not give me an error, but Novell noticed that the filesystem that contains /tmp only had around 1.9GB of free space and the .iso is around 3.2 GB. I deleted the .iso from the SMT server and re-uploaded directly to the repository filesystem (had around 8GB of free space).

I was then able to successfully upgrade, in place, SLES 11 SP4 to SLES 12 SP2.


Harley