A support call has been created for you HERE.
I sent the following to you via e-mail on Thursday 30th January 2014:
"Thank you for your support request.
The Hosted Storage feature of SQL Backup does not use the SQL Backup Agent Service to log in and perform the upload.
You need to create an account either through the SQL Backup GUI ->Registered Server name ->Right Click and select Server Options ->Hosted Storage settings ->create one now link which takes you to this web page https://sqlbackup.red-gate.com/LogIn
For backup jobs that you wish to upload to Hosted Storage, in Step 3 of the backup Wizard or Step 4 of the Scheduled Backup Wizard, enable the 'Copy backup to hosted storage Server linked to account:<account email address>' option, where the <account email address> is the account created in the previous paragraph, see attached screenshot408.jpg.
I hope the above helps."
As this is occurring on your production server, have you entered the account name and password details correctly?
Is there any Firewall or Proxy Server in place that would block the connection to the hosted storage server from your production server?
Does the production server have internet access?