I still see a lot of SQL Servers running using the LocalSystem account, particularly, MSDE 2000, which is very popular among third-party applications that requires storing data in a database. Others run a stand-alone SQL Server system and use LocalSystem account for the service accounts. While this may be a security risk, a lot of users still have them configured. And when they need to generate database backups on a shared folder, the SQL Server service's attempt to connect to network resources are denied access because they have no credentials and they are using a null session.Of course, a typical recommendation would be to change the service account to a local Windows or a domain account with least privilege but not everybody is open to that suggestion. So how do you allow SQL Server to generate a backup on a shared folder while using a LocalSystem account? The solution: enable null session shares
While I do not advocate such workarounds as it opens up additional security loopholes, it still is a workaround. And as I usuallly say, WARNING: This is not a recommended approach. Use at your own risk
Microsoft has a documented procedure to enable null sessions shares and while the KB article mentions Windows 2000, it does work for Windows Server 2003. This should be done on the Windows machine that hosts the shared folder. A word of caution if you intend to use this approach - document every step that you do and make sure you rollback any changes made after generating your database backup. Tasks like enabling the Guest user account (this is disabled by default), modifying the registry, etc. should be rolled back as soon as you're done, otherwise, you're opening up security vulnerabilities across your network.