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Power bi gateway error sql server name

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In power bi desktop i am connecting with the full server name as 12.123.1.12. When I use this server name in the service in order to connect the gateway, it will return:

"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: Named Pipes Provider, error: 40 - Could not open a connection to SQL Server)"

 

I have tried adding port number as well as using localhost. The latter works but this differs from the server name used in the power bi desktop so it wont connect the report to the gateway when published. 

 

Any help would be highly appreciated. 


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