This error occurs when the system is unable to list databases. This issue may arise if the SQL Server service and its associated services are not running.

To resolve this error, follow these steps to ensure that the necessary SQL Server services are running:

1. Check SQL Server Service: Verify that the SQL Server service is running. Navigate to the SQL Server service and ensure it is in the 'Running' state.

2. Verify Associated Services: Confirm that the following associated services are also running:

1. SQL Server Analysis Services CEIP (MSSQLSERVER)
2. SQL Server CEIP service (MSSQLSERVER)
3. SQL Server Integration Services 13.0
4. SQL Server Integration Services CEIP service 13.0
5. SQL Server Reporting Services (MSSQLSERVER)
6. SQL Server VSS Writer
   
7. SQL Server Agent

3. Restart Services if Necessary: If any of the services are not running, restart them to ensure proper functionality.

4. Reattempt Database Listing: After ensuring that all required services are running, try listing the databases again. The issue should be resolved.

Problem:

The user who can connect to the Microsoft SQL Server doesn't have proper permission to list the databases.

Solution:

Ensure that the ‘sysadmin’ permission is enabled for the user and attempt the backup process again.