For SQL Server connection strings with instance name, use the following syntax:
jdbc:sqlserver://[serverName[\instanceName][:portNumber]];databaseName=<database_name>
or
jdbc:sqlserver://<hostname>;instanceName=<instance_name>;databaseName=<database_name>
Note **: If you are providing using Datasource updater for IAM, make sure that you escape the slashes properly so that the JDBC string written in standalone.xml is of the above format.