I found that you do not need outlook to be open on the backup server, however, I did fing that the Cheyenne Alert Service needs to be configured to log on as the backup operator. If your backup server and exchange server are on diffferent domains like mine, you must add both accounts to the service. I created two different backup user accounts, one for each domain. Log into Alert Manager and be sure that the mailbox mathces the alias given to the user account on the exchage server. I hope this helps...I spent many hours trying to get this to work and I did the settings above and now I get my alerts.
One more thing....in ARCserve manager where you configure the email accounts....make sure that you log into the server (there is a tab) as the user account that the backup machine is logged into. Why? Have no idea but it works.
I hope this helps.