During the registration of an ARCserve 12.5 server you are requested to add the instance name. If entered incorrectly, you may get the following error messages:
Database Authentication Failed with ODBC connect to database Failed[Microsoft]ODBC SQL Server Driver][DBNETLIB]SQL Server does not exist or access denied.:56457 (0xDC89), fatal error #9 of ARC12_LL_D component
Ensure you enter the Backup server name and arcserve_db, in ArcServe Database Details section.
See example below: