Hi Sandeep,
In the SAP HCP context, you use SAP HANA Studio to connect to the SAP HANA database in the cloud. See https://help.hana.ondemand.com/help/frameset.htm?931927ceb9b04874999620c762c2a8f4.html for more details.
If you want to connect from your cloud application to a backend system, you use the connectivity service.
Hope this brings some clarity.
--Vlado