For a Microsoft Dynamics NAV Server instance to connect to and access a Microsoft Dynamics NAV database in SQL Server, the Microsoft Dynamics NAV Server instance must be authenticated by the database. As in SQL Server, Microsoft Dynamics NAV supports two authentication modes: Windows Authentication and SQL Server Authentication. When you set up Microsoft Dynamics NAV, you must ensure that database authentication is configured correctly on both the Microsoft Dynamics NAV Server instance and Microsoft Dynamics NAV database, otherwise the Microsoft Dynamics NAV Server instance will not be able to connect to the Microsoft Dynamics NAV database in SQL Server. By default, Windows Authentication is configured on the Microsoft Dynamics NAV Server instance and database.
For more information about SQL Server authentication, see How to: Configure SQL Server Authentication in Microsoft Dynamics NAV.