When connecting to SQL Server 2005, this failure may be caused by the fact that under the default settings SQL Server does not allow remote connections.
Solution
Case 1
If the issue occurs when trying to connect to a Remote SQL Server 2005, try the following steps:
- Go to Start > All Programs > Microsoft SQL Server 2005 > Configuration Tools > SQL Server Configuration Manager.
- Under SQL Server 2005 Network Configuration, make sure that TCP/IP or Named Pipes are listed as 'Enabled' (in order to enable them, right-click and choose Enable). If you had to enable them, you will need to restart the SQL Server service in order to take effect.
- Under SQL Native Client Configuration, make sure that TCP/IP or Named Pipes are listed as "Enabled" as well.
- Try to open the Notification Server Console (if you had Notification Server already running previously). Otherwise, run NSSetup one more time.
Case 2
If the issue occurs when trying to connect a local SQL Server 2005 using localhost as server name, please try the following (from the Notification Server 6.0 SP3 Release Notes):
6.1.9 Install Wizard failing to automatically detect locally installed SQL Server 2005
The Notification Server Install Wizard will fail to detect a locally installed SQL Server 2005 when "localhost" is entered as the SQL Server name and the following error is returned: Failed to get the list of available databases, check your database credentials.