Then the three choices I listed are most common reasons. It's a very different situation to use IP than to connect to localhost. Few things you should check, - try to ping the IP-address - check on server side that the listening port is 1433 or if it isn't, specify the correct port in connection string - check on server side that the other pc can listen to port 1433 (no Windows firewall blocking) - check that it isn't a named instance on the server or if it is, specify the instance name in connection string
The need to optimize rises from a bad design