Database connection from ArcCatalog 10.1 to SQL server not successful

I am trying to create a connection from ArcCatalog 10.1 to SQLserver. It is giving me below error message.

Attachment 34187

I can connect to the SQLServer using Management Studio.

I was able to connect to SQLServer (using same username/pass) from another PC with ArcCatalog 10.1 but not from mine.

I would appreciate any help.

Thanks.
Zaki Sarker

Attached Thumbnails