OLE DB error: OLE DB or ODBC error: A network-related or instance-specific error has occurred while establishing a connection to SQL Server. Server is not found or not accessible. Check if instance name is correct and if SQL Server is configured to allow remote connections. For more information see SQL Server Books Online.; 08001; Client unable to establish connection; 08001; Encryption not supported on the client.; 08001.

Error Message:
OLE DB error: OLE DB or ODBC error: A network-related or instance-specific error has occurred while establishing a connection to SQL Server. Server is not found or not accessible. Check if instance name is correct and if SQL Server is configured to allow remote connections. For more information see SQL Server Books Online.; 08001; Client unable to establish connection; 08001; Encryption not supported on the client.; 08001.

Tools:
SQL Server Data Tools for SQL Server 2012
Microsoft SQL Server 2012 

Scenario:
Using the above tools to create  a cube in a new business analysis solution, I was getting the top error when I try to process the cube. Finally I discovered that the issue was that I am using provider Native OLE DB\SQL Server Native Client 11.0 while the DB acceptability was SQL Serevr 2005 (90).

Resolution:
this can be solved by reverting to the provider Native OLE DB\SQL Server Native Client 10.0