1) The SQL Server services, on the Server containing the instance of SQL Server, must be running under a domain-level account (e.g. A Domain Administrator account). This is accomplished by changing the "Log On" properties for the services named "MSSQLSERVER" and "SQLSERVERAGENT" on the server running SQL Server (not your local instance). When you have completed changing the log on information for these 2 services, you will need to restart the "MSSQLSERVER" service on that server. Note that this will ask if you want to restart the "SQLSERVERAGENT" as well - Answer: Yes.

2) The SQL Server service account must have FULL CONTROL rights to the file system folder and to the share. That means you need to have a shared location in which the logon account you specified in 1 (above) has full control rights.

3) The file share should only be accessed via UNC name. Mapped drives may not be consistently visible to the SQL Service.

4) You cannot specify the path by using the browse ellipses (...). You must type the fully qualified path into the text box as:

file://ComputerName/ShareDirectoryWithRightsForDomain-levelAccountUsed/NameofFile.Extension

Additional Notes:

When creating or restoring backups on a network share, a significant increase in network traffic may result. You should ensure that your network can handle this without causing poor performance for other systems or end users. It may also benefit you to establish a dedicated physical network connection between your database server and your backup file host. Once the SQL Server instance is configured, you can use your local Enterprise Manager to create or restore a database backup that resides on a network device other than the device your instance of SQL Server is running on.