VM agent is unable to communicate with the Azure Backup Service.

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The issue is resolved.**

After spending two days and reading through several solutions, none of them worked. I tried blocking the Guest Agent update through the registry, but that didn’t work. I also tried changing the permissions of the WindowsAzure folder, but that didn’t work either. Finally, I fixed the issue and tested both an on-demand backup and one backup through policy—both worked well.

Solution that worked for me:

I hope this helps others too. I uninstalled the current Windows Azure Guest Agent, as I was sure the existing agent was caching incorrectly.

Stop the RDagent and Azure Guest Agent services.

In the service properties, go to the Recovery tab. For all three failure options, change them to Take No Action and set the reset failure counter to 1 day, with a reset count of 9 hours.

Rename the WindowsAzure folder to WindowsAzure.backup (or any name you prefer).

Install the Guest Agent version GuestAgent_2.7.41491.1183_x-xx.

After installation, both services will start again. Stop them immediately and go back to the Recovery tab. Set all three failure options back to Take No Action, reset the failure counter, and set the reset count to 9999. Make sure both services are stopped.

After installing the Azure Guest Agent, go to the WindowsAzure folder again. You will see a new folder named Package_XX_XX (with a timestamp). Copy this folder to another location—don’t cut and paste, just copy it.

Ensure both services are stopped and running from the Package_XX_XX folder. Afterward, start both services. Within two minutes, both services will be pointing to and running from the new location.

You will now see a new folder in the WindowsAzure directory with the name GuestAgent_2.7.41491.1193_xxx_xxx.

Stop both services again, change the recovery settings back to Take No Action, and reset the failure counters to 999. The Package_XX_XX folder will disappear after the update. Make sure both RDagent and Guest Agent services are stopped.

Rename the folder WindowsAzure\GuestAgent_2.7.41491.1193_xxx_xxx to WindowsAzure\GuestAgent_2.7.41491.1193_xxx_xxx.Backup.

Create a new empty folder in the WindowsAzure\GuestAgent_2.7.41491.1193_xxx_xxx directory with the exact same name as the original folder (just an empty folder).

1. Copy all the files from the saved Package_XX_XX folder to the new folder.WindowsAzure\GuestAgent_2.7.41491.1193_xxx_xxx
2. Once all the files are copied, start both services again. Your backup should now work fine.

Here’s a concise summary of the steps:

Uninstall the current Azure Guest Agent.

Stop the RDagent and Azure Guest Agent services.

In the Recovery tab, set failure actions to No Action, reset the failure counter to 1 day, and the reset count to 9 hours.

Rename the WindowsAzure folder to WindowsAzure.backup.

Install the version GuestAgent_2.7.41491.1183_x-xx.

Stop both services immediately after installation, and set the failure actions to No Action, with the reset count set to 9999.

Copy the Package_XX_XX folder (from WindowsAzure) to another location (don't cut, just copy).

Stop both services and ensure they are running from the copied Package_XX_XX folder.

Rename the old GuestAgent folder to Backup and create a new, empty folder with the same name.

1. Copy all files from the saved Package_XX_XX folder to the new folder WindowsAzure\GuestAgent_2.7.41491.1193_xxx_xxx

Start both services and verify that the backup works fine

I can only see two extensions in the Azure settings under Extensions + Applications: MDE.Windows and SiteRecovery-Windows. The agent status shows Not Ready and the version is listed as Unknown. The agent is installed but it is currently in a stopped state. I have already tried to start it, but it stops again.

Follow these steps to restore communication between the Windows Azure VM Guest Agent and Azure Backup and get backups running again on the Windows Server 2008 R2 VMs.

1. Verify VM and agent health in Azure

• In Azure portal, open VM → Settings → Properties and confirm:
  • Status is Running.
  • Agent status is Ready.
• If Agent status is not Ready, treat the agent as unhealthy and continue with the steps below.

2. Check for provisioning/extension issues

• Go to VM → Settings → Extensions and verify:
  • All extensions (especially VMSnapshot / Microsoft.Azure.RecoveryServices.VMSnapshot) show provisioning succeeded.
• If any extension is in a failed or updating state, fix or remove/redeploy that extension first, then retry backup. A failed extension or failed VM provisioning state can block backup.

3. Fix an unresponsive or crashing Windows Azure Guest Agent Because the Guest Agent service stops as soon as backup starts, treat this as an unresponsive/corrupted agent scenario:

1. Inside the VM, open services.msc and check:
   • Service name: Windows Azure Guest Agent (or Microsoft Azure Guest Agent).
   • Try Restart. If it stops again when backup runs, reinstall the agent.
2. Reinstall the Windows Azure VM Guest Agent cleanly:
   • In Control Panel → Programs and Features, locate Windows Azure Guest Agent / Microsoft Azure Guest Agent.
   • Uninstall it.
   • Download and install the latest supported agent MSI from the official link: latest version of the agent MSI.
   • Ensure installation is done with local Administrator rights.
   • Confirm the Guest Agent service appears and is Running in services.msc.
3. Verify .NET requirement on Windows Server 2008 R2:
   • Confirm Microsoft .NET Framework 4.5 (or later) is installed. The VM agent requires .NET 4.5 to communicate with Azure services. See Microsoft .NET 4.5 is installed.

4. Check for antivirus or application control blocking the backup extension If the Guest Agent crashes exactly when backup starts, an antivirus or application control product may be terminating IaaSBcdrExtension.exe or the plugin folder:

• On the VM, open Event Viewer → Windows Logs → Application.
• Look for entries around the backup time with faulting application name: IaaSBcdrExtension.exe.
• If present, configure AV exclusions and then retry backup:
  • Exclude these paths from real-time scanning:
    • C:\Packages\Plugins\Microsoft.Azure.RecoveryServices.VMSnapshot
    • C:\WindowsAzure\Logs\Plugins\Microsoft.Azure.RecoveryServices.VMSnapshot
• After updating AV settings, restart the Windows Azure Guest Agent service and run Backup Now again.

5. Ensure network requirements for agent and extensions If the agent or extension cannot reach Azure, backup can fail and the agent may appear unhealthy:

• Confirm outbound access from the VM to:
  • IP 168.63.129.16 (must not be blocked by Windows Firewall, third‑party firewall, or proxy).
  • Ports 80, 443, and 32526 as required for extensions.
• If a firewall or proxy is present, allow traffic to 168.63.129.16 and required ports. See What is IP address 168.63.129.16? and network access.

6. Confirm DHCP is enabled inside the guest

• Inside the Windows Server 2008 R2 VM, ensure the network adapter is configured to obtain IP via DHCP (even if using a static private IP at the Azure level). The guest must obtain the host/fabric address via DHCP for IaaS VM backup to work.

7. Run an on-demand backup test After completing the above on one affected VM:

• In Azure portal, go to Recovery Services vault → Backup items → Azure virtual machine → [your VM] → Backup now.
• Monitor the job. If it succeeds, repeat the same remediation (agent reinstall, AV exclusions, firewall/DHCP checks) on the remaining Windows Server 2008 R2 VMs.

If, after these steps, the Guest Agent still stops as soon as backup starts on all 2008 R2 VMs, capture the WaAppAgent.log and Application event logs and open an Azure support request, as this may require a product-side hotfix for that specific agent build on Windows Server 2008 R2.

References:

• Troubleshoot Azure Backup failures caused by agent or extension issues
• Step-by-step guide to troubleshoot backup failures
• GuestAgentSnapshotTaskStatusError - Could not communicate with the VM agent for snapshot status
• Troubleshoot Azure Windows VM Agent issues
• Troubleshoot restore point failures: Issues with the agent or extension