Symptoms
After backing up the database and restoring it on another database server, they changed the configuration in service instance to point to the new database server. However, when executing a smartobject, there is an error message saying "[database] cannot be opened because it is offline".
Registering a new service instance with the new database also did not resolve the issue.
Diagnoses
Their SQL server is on a different server (not local). They have separated the k2 server and mssql server.
Resolution
Setting the "Use Native SQL Execution" field to false and "On Different SQL server" to true.