Check to see if the SQL Server services are running, if the server can be reached from the workstation, or if the 'sa' SQL Server user has been altered or disabled.
There are a number of reasons for this message to appear so here are some common causes and troubleshooting tips for addressing it. Most situations for this error are covered in this article but common reasons and troubleshooting tips are addressed here.
SQL Server Services Are Stopped
The services for the SQL Server instance or SQL Server Browser may not be running. Open SQL Server Configuration Manager then select SQL Server Services on the left. Make sure that the services for SQL Server (INSTANCENAME) and SQL Server Browser are running. If not, right click the service and choose Start.
Acctivate and Acctivate Data Shares
SQL Server Account Can't Be Logged Into
One possibility is that the SQL account that Acctivate is using to log into the database is disabled or locked out. Normally this is the 'sa' account but if you want to make sure, open Acctivate Database Maintenance then click on Database > Database Sources. Select a source to see what User ID being used is. This is also where you can update the password entered if it has changed.
To check the account, install SQL Server Management Studio and log into the instance mentioned in the error (SERVERNAME\INSTANCENAME) with Windows Authentication.
Within the Object Explorer on the left, expand Security then Logins. Double click the account Acctivate is logging in with (usually 'sa') or right click it and choose Properties. Within the Status page, you can see if the ability to login is disabled or if it's locked out. If it is locked it, it's most likely due to password policy settings for the server or domain. To confirm, go back to the General page and uncheck the option "Enforce password policy".