A network-related error occurred while establishing a connection to SQL Server

Question

I have created a web application in which i am interacting with the sql server database. The application is uploaded in the IIS server.

It was working fine but all of a sudden when i started my system I got the following error.

A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: SQL Network Interfaces, error: 26 - Error Locating Server/Instance Specified)

I have checked the sql configuration tool, server is running. The stack trace I am getting is given below.

A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: SQL Network Interfaces, error: 26 - Error Locating Server/Instance Specified)

Description: An unhandled exception occurred during the execution of the current web request. Please review the stack trace for more information about the error and where it originated in the code.

Exception Details: System.Data.SqlClient.SqlException: A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: SQL Network Interfaces, error: 26 - Error Locating Server/Instance Specified)

**Source Error:** 

An unhandled exception was generated during the execution of the current web request. Information regarding the origin and location of the exception can be identified using the exception stack trace below.

Stack Trace: 

[SqlException (0x80131904): A network-related or instance-specific error occurred while establishing a connection to SQL Server. The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. (provider: SQL Network Interfaces, error: 26 - Error Locating Server/Instance Specified)] System.Data.SqlClient.SqlInternalConnection.OnError(SqlException exception, Boolean breakConnection, Action1 wrapCloseInAction) +6675958 System.Data.SqlClient.TdsParser.ThrowExceptionAndWarning(TdsParserStateObject stateObj, Boolean callerHasConnectionLock, Boolean asyncClose) +688 System.Data.SqlClient.TdsParser.Connect(ServerInfo serverInfo, SqlInternalConnectionTds connHandler, Boolean ignoreSniOpenTimeout, Int64 timerExpire, Boolean encrypt, Boolean trustServerCert, Boolean integratedSecurity, Boolean withFailover) +6702504 System.Data.SqlClient.SqlInternalConnectionTds.AttemptOneLogin(ServerInfo serverInfo, String newPassword, SecureString newSecurePassword, Boolean ignoreSniOpenTimeout, TimeoutTimer timeout, Boolean withFailover) +219 System.Data.SqlClient.SqlInternalConnectionTds.LoginNoFailover(ServerInfo serverInfo, String newPassword, SecureString newSecurePassword, Boolean redirectedUserInstance, SqlConnectionString connectionOptions, SqlCredential credential, TimeoutTimer timeout) +6704598 System.Data.SqlClient.SqlInternalConnectionTds.OpenLoginEnlist(TimeoutTimer timeout, SqlConnectionString connectionOptions, SqlCredential credential, String newPassword, SecureString newSecurePassword, Boolean redirectedUserInstance) +6705099 System.Data.SqlClient.SqlInternalConnectionTds..ctor(DbConnectionPoolIdentity identity, SqlConnectionString connectionOptions, SqlCredential credential, Object providerInfo, String newPassword, SecureString newSecurePassword, Boolean redirectedUserInstance, SqlConnectionString userConnectionOptions) +610 System.Data.SqlClient.SqlConnectionFactory.CreateConnection(DbConnectionOptions options, DbConnectionPoolKey poolKey, Object poolGroupProviderInfo, DbConnectionPool pool, DbConnection owningConnection, DbConnectionOptions userOptions) +1049 System.Data.ProviderBase.DbConnectionFactory.CreatePooledConnection(DbConnectionPool pool, DbConnectionOptions options, DbConnectionPoolKey poolKey, DbConnectionOptions userOptions) +74 System.Data.ProviderBase.DbConnectionPool.CreateObject(DbConnectionOptions userOptions) +6707667 System.Data.ProviderBase.DbConnectionPool.UserCreateRequest(DbConnectionOptions userOptions) +78 System.Data.ProviderBase.DbConnectionPool.TryGetConnection(DbConnection owningObject, UInt32 waitForMultipleObjectsTimeout, Boolean allowCreate, Boolean onlyOneCheckConnection, DbConnectionOptions userOptions, DbConnectionInternal& connection) +2192 System.Data.ProviderBase.DbConnectionPool.TryGetConnection(DbConnection owningObject, TaskCompletionSource1 retry, DbConnectionOptions userOptions, DbConnectionInternal& connection) +116 System.Data.ProviderBase.DbConnectionFactory.TryGetConnection(DbConnection owningConnection, TaskCompletionSource1 retry, DbConnectionOptions userOptions, DbConnectionInternal& connection) +1012 System.Data.ProviderBase.DbConnectionClosed.TryOpenConnection(DbConnection outerConnection, DbConnectionFactory connectionFactory, TaskCompletionSource1 retry, DbConnectionOptions userOptions) +6712291 System.Data.SqlClient.SqlConnection.TryOpen(TaskCompletionSource`1 retry) +152 System.Data.SqlClient.SqlConnection.Open() +229 System.Data.Common.DbDataAdapter.FillInternal(DataSet dataset, DataTable[] datatables, Int32 startRecord, Int32 maxRecords, String srcTable, IDbCommand command, CommandBehavior behavior) +292 System.Data.Common.DbDataAdapter.Fill(DataSet dataSet, Int32 startRecord, Int32 maxRecords, String srcTable, IDbCommand command, CommandBehavior behavior) +420 System.Data.Common.DbDataAdapter.Fill(DataSet dataSet, String srcTable) +280 System.Web.UI.WebControls.SqlDataSourceView.ExecuteSelect(DataSourceSelectArguments arguments) +3581727 System.Web.UI.WebControls.ListControl.OnDataBinding(EventArgs e) +176 System.Web.UI.WebControls.ListControl.PerformSelect() +51 System.Web.UI.WebControls.BaseDataBoundControl.EnsureDataBound() +146 System.Web.UI.WebControls.ListControl.OnPreRender(EventArgs e) +36 System.Web.UI.Control.PreRenderRecursiveInternal() +113 System.Web.UI.Control.PreRenderRecursiveInternal() +222 System.Web.UI.Control.PreRenderRecursiveInternal() +222 System.Web.UI.Page.ProcessRequestMain(Boolean includeStagesBeforeAsyncPoint, Boolean includeStagesAfterAsyncPoint) +4297

My firewall is off so there is no issue of that. Please note I have sql server 2008 and 2012 both installed in my system. So for that I have upgraded the 2008 to service pack 3. Can anyone please tell me why all of a sudden I got this issue?

And how can I resolve it?