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Can anyone please help me with this as I'm sure im missing something small.

I am installing SP2010 on a Win7 Prof machine. All components on one machine. SQL2008R2 installed and all the features are activeted as per this script on this site:

But now I'm executing this in Powershell:

$sp_cfdatabasename = "SP2010_ConfigDB"
$sp_cadatabasename = "SP2010_Admin_Content"
$sp_databaseserver = "HomeDev"
$sp_passphrase = (ConvertTo-SecureString "SP_Svc1_" -AsPlainText -force)
$sp_password = (ConvertTo-SecureString "SP_Svc1" -AsPlainText -force)
$sp_username = "Lüs-PC\SP_Svc"

# Clean up the credentials
$sp_credentials = New-Object System.Management.Automation.PsCredential $sp_username,$sp_password

# Execute the config wizard
Write-Host "Add configuration and administration databases"
New-SPConfigurationDatabase -DatabaseName $sp_cfdatabasename -DatabaseServer $sp_databaseserver -AdministrationContentDatabaseName $sp_cadatabasename -Passphrase $sp_passphrase -FarmCredentials $sp_credentials

I keep on getting this below:

New-SPConfigurationDatabase : Cannot connect to database master at SQL server at HomeDev. The database might not exist, or the current user does not have permission to connect to it.

I did verify all permissions for the installation account and SP_Svc account in SQL.

HomeDev is a SQL Alias for my server name as I have a special character in my machine name.

Does anyone have any info on why this is happaning?

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I usually see this error message when the Windows Firewall is blocking access to SQL Server. Did you open the correct port?

You can check if you can reach your SQL Server via an alias by using a little trick I describe on my blog ("Testing Your Alias" at the bottom of the article):

If that does not work, I suggest looking at your SQL Alias configuration.

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I have also this error. In my case solution was simple:
If your SQL Server has 'Named Instances' you should write full name including your machine name: MY-MASHINE\MY-SQLSERVERNAME

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