Unable to add a SQL Server Asset, Task completed with failure (261806)

When creating a SQL asset with Authentication Type set to Directory Account or Local System Account, and using Named Pipes to connect to the asset, the Check Connection will fail and produce this error in the Task Output:

Connecting to asset example.fqdn failed with error: [DBNETLIB]SQL Server does not exist or access denied..
System connection test failed.
Saving task results.
Task completed with failure.

For Safeguard 2.7 and above:

Safeguard now uses a TCP/IP connection instead of Named Pipe for a Directory Account or Local System Account. Named pipes can still be used by ticking the "Use Named Pipe for service account connection"

For versions below 2.7:

Switching Authentication Type to Local System Account or Password will allow for a connection without Named Pipes.

If a Directory Account, Named Pipes need to be enabled within SQL Server Configuration Manager:

·        Open Protocol settings for the SQL instance within SQL Server Configuration Manager

·        Right Click on Named Pipes

·        Click Enable

·        Restart SQL instance service