Update PATH environment variable with folder location where sqljdbc_auth.dll is located.
After this you would observe another issue. Splunk would not pick right user name from the connection. In my case it picked [host name]$
SOLUTION
Use jTDS driver.
Download it from [jTDS][1].
Unpack the zip and copy jtds-1.3.1.jar to C:\Program Files\Splunk\etc\apps\splunk_app_db_connect\bin\lib
Restart splunk server
[1]: https://sourceforge.net/projects/jtds/files/,**SECOND :**
You should use jTDS driver to resolve this issue. Looks like Micorsoft Driver is not supported by Splunk for this scenario.
I tried it with good configuration but I observed splunk picking wrong user name and not the user name provided in the connections (splunk server host name) while connecting to SQL Server.
Download jTDS drivers from : https://sourceforge.net/projects/jtds/files/
Unzip the packages and place the jtds-1.3.1.jar in C:\Program Files\Splunk\etc\apps\splunk_app_db_connect\bin\lib
FIRST :
To resolve your error : Makesure that the PATH variable is set to folder where sqljdbc_auth.dll exists ( careful about x86 and x64).
After doing this, you would run into another issue as described above.
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