Yes you can connect to an external database but only as a target application for reconciliation or an authoritative source for User Imports. You cannot connect to external database to run Analytivs or drive workflows from.
@avinashchhetri You can pull data in analytics via connecting external database.
You can show external database data without pulling data inside SSM but you cant use data in workflow unless you store in SSM Database (Endpoint./Account/Entitlement)
Steps [Only for database connector]