In order to run the SnapManager Backup and Restore functions, the SnapManager service account must have sysadmin fixed server role privileges on the SQL Server. This is usually addressed by giving the Windows user account administrator rights on the SQL Server. You can meet this requirement by adding the Windows domain account used by SnapManager to the system administrator’s server role on the SQL Server.
SQL Server authentication: When using SQL Server authentication, the SQL Server administrator must have sysadmin server role privileges on the SQL Server instance. SnapManager for SQL Server requires that the database administrator have the required privileges to mount and dismount databases, back up data and transaction log files, and restore those same files. The system administrator role fulfills all these permissions requirements.
Windows authentication: When using Windows authentication, the Windows account that you are logged onto the system with must have system administrator privileges on the SQL Server. This account is presumably the same account running SnapDrive. However, some organizations give different categories of administrators different responsibilities and therefore different levels of access. For example, one group of administrators might run Chapter 2: Preparing to Install or Upgrade SnapManager 27 SnapManager to manage the SQL Server databases while another group of administrators might run SnapDrive to manage the LUNs. In this case, separate accounts would be used for SnapDrive and SnapManager. The SnapManager server would still run under the SnapManager user account.
Finally in my case Snapmanager user account and service account didn't have system administrator privileges on the SQL Server.