To use SQL Server, an SQL-srv account has to be used as opposed to a Windows-authenticated (AD) account. Furthermore, the following is required:
Database host
(Optional) Database port
Database name
Database username
Database password
Leave the username and password empty to use the local user of the system. When you do this, make sure to change the logon user of the service when running the application as service in the background to match this user.
Using a host like machine01instance? Write it like this: machine01instance
Password cannot contain $
signs.