Provided the program can run on the server, that indicates the SQL Server is hosting the database as it should, as well as connectivity (at least locally) is in place. There are likely 4 possible causes of the problem:
- Windows Firewall. If enabled, there may be need to setup exceptions to allow connectivity through the firewall. The following document should hopefully point you in the right direction: Firewall configuration
- Enabled Named Pipes and/or TCP/IP.
- On the server, click Start / All Programs / Microsoft SQL Server 2008 R2 / Configuration Tools / SQL Server Configuration Manager.
- Here, drill into SQL Server Network Configuration.
- Highlight Protocols for your SQL Server instance name
- On the right side of the split, verify that Named Pipes is Enabled.
- On the right side of the split, verify that TCP/IP is Enabled.
- SQL Server Browser Service: Make sure that the 'SQL Server Browser' service is installed and Started in Services.
- There may be need to add any Active Directory login(s) to the database that will need to access the data. If using the ESHA instance of SQL Server (where \ESHA is in the ServerName), follow this KB article. If you are using your own instance of SQL Server, use SQL Server Management Studio to add the user's Windows Authentication (Active Directory user, or AD Group) to the role 'FPRole' that exists in the database.