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The issue occurs because Microsoft Forefront TMG disables the SQL Browser service by default.

IMSS uses SQL server as the database server, but it does not listen to the default port number 1433. It uses a dynamically assigned port when started, and the SQL server needs the SQL Browser service to identify this port. However, because TMG disabled the service, the IMSS service failed to connect to its database instance.

You need to manually enable the SQL Browser service so that the IMSS Policy Service can start. Do the following:

  1. From the Start menu, go to SQL Server 2008 > SQL Server Configuration Manager.
  2. Open the SQL Server Services.
  3. Right-click SQL Server Browser and then click Properties.
  4. On the Service tab, set the Start mode to "Automatic".
  5. Click Apply > Ok.
  6. Right-click SQL Server Browser and then click Start.
  7. Start the IMSS Policy Service.