@ Nathan ,
Thanks very much for your reply. I do not even see the logon screen from the Tableau prep. Below the error after hitting to connect.
After speaking to network team, they have confirmed that the Tableau Prep tool bypasses the internal proxy and tries to navigate through our firewalls. This causing the Tableau prep tool fails to connect Tableau online since the traffic directly try to go through the firewall and not through the proxy. Awaiting response from Tableau for the workaround.
Tableau recognised this as a bug, the development team is working for a fix to the issue but not sure which release of tableau prep tool will have the fix for this issue. Interim fix for the issue is edit the net. properties file to configure the proxy settings and Tableau Prep was also able to connect to Tableau Online:
C:\Program Files\Tableau\Tableau Prep 2018.1.2\Plugins\jre\lib\net.properties
Thanks to Tableau support for extended help