It is only possible to connect to SQL Server Desktop Engine databases and Microsoft Access databases with this version of Visual Studio.
This edition of Visual Studio .NET edition can only connect to a database on the SQL Server Desktop Engine or a Microsoft Access database (.mdb). If you want to connect to a database on other Microsoft SQL Servers or an Oracle database, you must purchase either a Professional or Enterprise edition of Visual Studio .NET.
To correct this error
Create a new connection using either the SQL Server Desktop Engine or the Microsoft Access database.