Hi,
I actually have the same problem as Hari Das.
Im using a virtual maschine within Windows Azure where SQL Server 2012 is installed on
(SQL Server 2012 SP1 Standard on Windows Server 2008 R2 SP1).
I already enabled remote connection (as described here: http://blogs.msdn.com/b/walzenbach/archive/2010/04/14/how-to-enable-remote-connections-in-sql-server-2008.aspx
and server authentication for SQL Sever credentials and Windows account.
Is there anything else I can do to solve this issue?