.To resolve this problem, change the Server authentication from Windows Authentication mode to SQL Server and Windows Authentication mode

:To change the authentication mode to SQL Server and Windows, follow these steps

.On the computer that is running Microsoft SQL Server, open SQL Server Management Studio 2005

:To open SQL Server Management Studio
 Click Start, and then click All Programs
 Point to Microsoft SQL Server 2005 or Microsoft SQL Server 2008, and then click SQL Server Management Studio. The Connect to Server window opens
 In the Server name box, type the name of the instance of SQL Server
. In the Authentication list, click Windows Authentication
. Click Connect

 In the Object Explorer window pane, right-click the SQL Instance and select Properties

 Click Security under the select a page options

  Change Server Authentication to SQL Server and Windows Authentication and click ok

  Click ok to the prompt message about changes not taking affect until the instance is restarted

  Right-click the SQL Instance in the Object Explorer and select Restart

  Click Yes to restart the instance and if prompted to restart the SQL Server Agent

After these changes have been applied and the SQL Instance has been restarted, attempt to verify the ODBC connection with the ‘sa’ account credentials

Source

microsoft.com