We had the same problem after disabling TLS1.0 on the server for the SQL server.
The problem is not the development client (finsql.exe), but the ODBC driver used, which is installed and used by the development client.
Since we had NAV 2015 CU5 in use, the ODBC driver "SQL-Server Native Client 11.0" (2011.110.701.00) from 11.02.2012 was installed. NAV 2015 CU49 comes with the same ODBC driver from Microsoft.
You can test yourself if the ODBC driver can connect to the database. Open the program "ODBC Data Sources (64-Bit)" on the NAV server. Click in the tab "User DSN" on "Add...".
First check the driver date from "SQL Server Native Client 11.0". The date already gives the first hint if you have an old client.
Then click on "Finish".
In the new Datasource dialog enter any name and in Server enter the SQL server name.
Click "Next >" to enter the required credentials or use Windows authentication and click "Next >".
In the next window check "Change the default database to". Then try to expand the list.
If you don't get an error message, but the list unfolds and you see the existing databases, then the development client has another problem, which I don't know about.
If you get an error message, the ODBC driver cannot connect to the SQL server you have to replace it.
Error text:
Connection failed:
SQLState '08001'
SQL Server Error: 10054
[Microsoft][SQL Server Native Client 11.0]Client unable to establish connection
To do this, close the Data Resource Creation window and proceed as follows:
Download the latest 64-bit ODBC driver from Microsoft:
www.microsoft.com/.../details.aspx
Copies the sqlncli.msi to the NAV server and executes it.
When prompted if you want to update the client, click "Yes" and follow the installation instructions.
After the installation you can either open the development client directly and test the connection to the SQL server or you can do it via the "ODBC Data Sources (64-Bit)" and do the steps until loading the SQL databases.
