The Shared Memory protocol can only be used locally, therefore, this protocol is used only when connecting with a local database.
To create a database connection cache for the SQL Server database over the Shared Memory protocol:
Input the local machine name, or a dot (.), or localhost (or local) in the Server host field. This indicates that a local database will be connected and the Shared Memory protocol will be used by default. (Note that if the server host is set to the local IP address, TCP/IP will be used.)
