Failed to login to SQL Instance '(local)'

This usually would indicate that the correct credentials need to be set on the SQL Plugin. Either the credentials have not been set yet, wrong, or may have been changed on the SQL side, so the plugin cannot authenticate to the SQL instance to do the backup.

Thanks Andre that's what I was thinking. I do have another question how do I set that password in the SQL Plugin? Can you point me in the right direction?

Sure.
The quickest way to do this is to go to the "Create Backup" window
Then, expand the client where the SQL Plugin is installed
-Highlight the SQL Plugin-> Hit the "Actions" button above and Select "Configure"
-A screen to enter the SQL Authentication type will come up
-Select the SQL Authentication type, and then enter the correct authentication info
-Click OK and make sure you can then expand the plugin to see the SQL Databases
-If it is successful, it will show you the databases
-You can then close the Window and attempt the backup again.

(In MOST cases, the notes below are not an issue when the above items are done, however...)
*Note, if it still fails after this is done, it would then indicate that while the credentials are sufficient to login to SQL, they may not have the required permissions to actually conduct a backup/restore against the databases.
You will need to make sure that the credentials you supplied have the required permissions/roles to allow for backup and restore.

Please refer to the SQL Plugin User's Guide under the section "Configuring the Plugin" to ensure these requirements are met.
support.quest.com/.../

Okay that got me all taken care of Andre. Thanks for your help.

Great to hear. Happy to help!