Following an in-place upgrade of an Azure VM from Server 2012 to Server 2016, Azure Recovery Services is unable to complete backups.

Restart COM+ System Application, verify that Distributed Transaction Coordinator (MSDTC) runs as Network Service, and then trigger a new backup; these are Microsoft’s specific remediation steps for ExtensionSnapshotFailedCOM. ^1^

1. Repair the COM+/MSDTC service path

Perform this during a maintenance window because restarting these services can affect applications that use distributed transactions.

1. Open services.msc.
2. Open Distributed Transaction Coordinator:
   • Confirm Log On As is Network Service.
   • If it is not, open Properties → Log On, select This account, enter NT AUTHORITY\NetworkService, clear both password fields, and apply the change.
   • Start or restart the service.
3. Open COM+ System Application and start or restart it.
4. Alternatively, start both from an elevated command prompt:

sc qc MSDTC
net stop MSDTC
net start MSDTC
net stop COMSysApp
net start COMSysApp

5. In the Azure portal, go to Recovery Services vault → Backup items → Azure Virtual Machine → the VM → Backup now.
6. Monitor Recovery Services vault → Backup Jobs and confirm that Take Snapshot completes.

Azure Backup uses the VM Snapshot extension for application-consistent snapshots, so a COM+/MSDTC failure inside the guest can block snapshot creation even when the agent and extension have been reinstalled successfully. ^2^

2. Reinstall MSDTC only if its service cannot start or restart

This changes the MSDTC configuration and can affect transaction-dependent applications. Record any application-specific MSDTC settings first and perform the work during downtime.

From an elevated command prompt:

net stop MSDTC
msdtc -uninstall
msdtc -install
net start MSDTC
net start COMSysApp

Then reboot if Windows reports a pending restart and trigger another manual backup. Microsoft documents MSDTC reinstallation specifically as the fallback when the service cannot be restarted. ^1^

3. If COM+ and MSDTC are healthy, check VSS

The snapshot extension depends on Windows Volume Shadow Copy Service (VSS). ^3^

Run this from an elevated command prompt immediately after a failed backup:

vssadmin list writers
sc query VSS
sc query COMSysApp
sc query MSDTC

• Every VSS writer should report State: [1] Stable and No error.
• For any writer in another state, identify its owning service in Event Viewer → Windows Logs → Application, then restart that service during a maintenance window.
• Also inspect the Application and System logs at the exact failure time for sources such as VSS, COM+, DistributedCOM, or MSDTC.
• If the VSS service itself is unhealthy, restart Volume Shadow Copy and retry the backup. The Azure troubleshooting guide provides separate remediation for bad VSS writer and VSS service states. ^1^

4. Check extension evidence before escalating

Since reinstalling the VM Agent and VMSnapshot extension did not resolve this, do not repeat those actions. Instead:

1. In the Azure portal, open VM → Settings → Extensions + applications.
2. Confirm every extension reports Provisioning succeeded; another failed extension can interfere with backup. ^4^
3. Review logs under:

C:\WindowsAzure\Logs\Plugins\Microsoft.Azure.RecoveryServices.VMSnapshot
C:\Packages\Plugins\Microsoft.Azure.RecoveryServices.VMSnapshot

4. If Event Viewer records IaaSBcdrExtension.exe as the faulting application, antivirus interference is specifically indicated. Add exclusions for those two directories and retry; do not disable protection broadly unless your security process permits a controlled test. ^4^

If the failure remains, open an Azure support request and include the failed job ID and timestamp, VMSnapshot logs, vssadmin list writers output, relevant Event Viewer entries, and MSDTC/COMSysApp service configuration. This allows support to distinguish a remaining guest COM+/VSS problem from a service-side backup failure without another eight-hour diagnostic run.

References

1. Troubleshooting backup failures on Azure virtual machines
2. VM Snapshot Windows extension for Azure Backup
3. Volume Shadow Copy Service (VSS) | Microsoft Learn
4. Troubleshoot Azure Backup failures caused by agent or extension issues