Azure Backup SQL Workload extension crashes with NullReferenceException in IaaSServiceBase.Initialize() on Windows Server 2025 — first-time registration fails on every attempt

Question

Azure Backup SQL Workload extension crashes with NullReferenceException in IaaSServiceBase.Initialize() on Windows Server 2025 — first-time registration fails on every attempt

dMar 0

I'm unable to register SQL Server workload backup for any new VM built on Windows Server 2025 in a vault. The AzureBackupWindowsWorkload extension installs successfully, then crashes immediately with an unhandled NullReferenceException, and Azure Backup automatically rolls back and removes the extension. This is reproducible on two independently built VMs, both registering for SQL workload backup for the very first time.

Environment

OS: Windows Server 2025 Datacenter, Build 26100
SQL Server: 2022 (RTM-CU26), Standard Edition, default instance
Extension: Microsoft.Azure.RecoveryServices.WorkloadBackup.AzureBackupWindowsWorkload, version 1.1.0.145
MSI: "Azure Workload Backup", installs as 2.0.9258.0, then updates in-place to 2.0.12000.0 immediately before the crash
SQL IaaS Agent Extension: healthy, provisioning succeeded, Least Privilege Mode enabled
Recovery Services vault: UK South region, Standard tier
Basic VM-level (non-SQL) backup works fine on the same VM

What happens

Backup Items → Add → SQL Database in Azure VM → select server → Start Discovery
Portal returns:

   The resource write operation failed to complete successfully, because it reached terminal
   provisioning state 'Failed'. (Code: ResourceDeploymentFailure, Target: .../backupFabrics/Azure/
   protectionContainers/VMAppContainer;Compute;<rg>;<vm-name>)

VM Activity Log shows the extension actually installing successfully, then being deleted again by the Backup Management Service under a minute later.
Windows Event Viewer (Application log) shows the real cause at the same timestamp:

   Source: AzureWLBackupCoordinatorSvc

   Service cannot be started. System.NullReferenceException: Object reference not set to an
   instance of an object.
      at Microsoft.Internal.CloudBackup.WorkloadExtension.Services.IaaSServiceBase.Initialize()
      at Microsoft.Internal.CloudBackup.WorkloadExtension.Services.ExtensionCoordinatorServiceHost.OnStart(String[] args)
      at System.ServiceProcess.ServiceBase.ServiceQueuedMainCallback(Object state)

This exact sequence (install → crash → automatic rollback) reproduces identically every time, including after a fully clean reinstall (manually removed the extension's package/log folders under C:\Packages\Plugins\... and C:\WindowsAzure\Logs\Plugins\... before retrying).I'm unable to register SQL Server workload backup for any new VM built on Windows Server 2025 in a particular subscription/vault. The AzureBackupWindowsWorkload extension installs successfully, then crashes immediately with an unhandled NullReferenceException, and Azure Backup automatically rolls back and removes the extension. This is reproducible on two independently built VMs, both registering for SQL workload backup for the very first time.

Environment

OS: Windows Server 2025 Datacenter, Build 26100
SQL Server: 2022 (RTM-CU26), Standard Edition, default instance
Extension: Microsoft.Azure.RecoveryServices.WorkloadBackup.AzureBackupWindowsWorkload, version 1.1.0.145
MSI: "Azure Workload Backup", installs as 2.0.9258.0, then updates in-place to 2.0.12000.0 immediately before the crash
SQL IaaS Agent Extension: healthy, provisioning succeeded, Least Privilege Mode enabled
Recovery Services vault: UK South region, Standard tier
Basic VM-level (non-SQL) backup works fine on the same VM

What happens

Backup Items → Add → SQL Database in Azure VM → select server → Start Discovery
Portal returns:

   The resource write operation failed to complete successfully, because it reached terminal
   provisioning state 'Failed'. (Code: ResourceDeploymentFailure, Target: .../backupFabrics/Azure/
   protectionContainers/VMAppContainer;Compute;<rg>;<vm-name>)

VM Activity Log shows the extension actually installing successfully, then being deleted again by the Backup Management Service under a minute later.
Windows Event Viewer (Application log) shows the real cause at the same timestamp:

   Source: AzureWLBackupCoordinatorSvc

   Service cannot be started. System.NullReferenceException: Object reference not set to an
   instance of an object.
      at Microsoft.Internal.CloudBackup.WorkloadExtension.Services.IaaSServiceBase.Initialize()
      at Microsoft.Internal.CloudBackup.WorkloadExtension.Services.ExtensionCoordinatorServiceHost.OnStart(String[] args)
      at System.ServiceProcess.ServiceBase.ServiceQueuedMainCallback(Object state)

This exact sequence (install → crash → automatic rollback) reproduces identically every time, including after a fully clean reinstall (manually removed the extension's package/log folders under C:\Packages\Plugins\... and C:\WindowsAzure\Logs\Plugins\... before retrying).

I've been through all the network checks and account permissions, A full unregister/re-register of the SQL VM resource in azure.
Has anyone else seen IaaSServiceBase.Initialize() throw a NullReferenceException on Server 2025, or hit issues registering SQL workload backup specifically on Server 2025 + SQL 2022

Himaja Y 455 Reputation points Microsoft External Staff Moderator

2026-08-18T14:03:12.19+00:00
Hi dMar,

Thank you for providing the details.

This looks like an Azure Backup extension issue with Windows Server 2025, rather than a network or permission problem.

The same issue occurs on two clean VMs, and the extension installs successfully but then crashes with

NullReferenceException in IaaSServiceBase.Initialize().

Since SQL IaaS Agent and normal VM backup are working, I recommend:

Test SQL workload backup on Windows Server 2022 using the same vault.

If possible, test Server 2025 with another Recovery Services vault/subscription.

Collect the Azure Backup extension and Event Viewer logs.

Contact Microsoft Azure Backup Support and ask them to confirm whether the current AzureBackupWindowsWorkload extension supports Windows Server 2025 build 26100.

Ask whether there is a known issue or newer extension version for this NullReferenceException.

Based on the symptoms, this may require a Microsoft-side fix or updated extension rather than further VM configuration changes.
Himaja Y 455 Reputation points Microsoft External Staff Moderator

2026-08-19T14:29:25.3566667+00:00

Hi @dMar ,

I hope you had a chance to review the information shared earlier, and I hope this information has been helpful! If you still have questions, please let us know what is needed in the comments so the question can be answered.
dMar 0 Reputation points

2026-08-20T20:31:13.2833333+00:00

Thank you for the reply and suggestions. I've Tested on a new VM on windows server 2022 with SQL 2022 and SQL 2019, a new vault and still fails with the same error. I'll look at the RG next and set up a new one.

2 answers

Your answer

Himaja Y 455 Reputation points Microsoft External Staff Moderator

2026-08-18T14:03:12.19+00:00

Hi dMar,

Thank you for providing the details.

This looks like an Azure Backup extension issue with Windows Server 2025, rather than a network or permission problem.

The same issue occurs on two clean VMs, and the extension installs successfully but then crashes with

NullReferenceException in IaaSServiceBase.Initialize().

Since SQL IaaS Agent and normal VM backup are working, I recommend:

Test SQL workload backup on Windows Server 2022 using the same vault.

If possible, test Server 2025 with another Recovery Services vault/subscription.

Collect the Azure Backup extension and Event Viewer logs.

Contact Microsoft Azure Backup Support and ask them to confirm whether the current AzureBackupWindowsWorkload extension supports Windows Server 2025 build 26100.

Ask whether there is a known issue or newer extension version for this NullReferenceException.

Based on the symptoms, this may require a Microsoft-side fix or updated extension rather than further VM configuration changes.
Himaja Y 455 Reputation points Microsoft External Staff Moderator

2026-08-19T14:29:25.3566667+00:00

Hi @dMar ,

I hope you had a chance to review the information shared earlier, and I hope this information has been helpful! If you still have questions, please let us know what is needed in the comments so the question can be answered.
dMar 0 Reputation points

2026-08-20T20:31:13.2833333+00:00

Thank you for the reply and suggestions. I've Tested on a new VM on windows server 2022 with SQL 2022 and SQL 2019, a new vault and still fails with the same error. I'll look at the RG next and set up a new one.

Answer 1

dMar 0

After a lot of fun and games it was resolved down to an issue with azure firewall rules. Several urls were being blocked to the backups. Removing all the rules worked and then it was tested applying the rules and correcting until it worked. Thank you for your help.

0 comments

Answer 2

Hi @dMar ,

Thank you for the update.

Since the issue is still occurring even after testing with a new Windows Server 2022 VM, SQL Server 2019/2022, and a new Recovery Services vault, this helps rule out the VM, SQL Server version, and vault configuration as the likely cause.

As the same error persists, please share the latest error details/logs from the failed backup job and confirm the Recovery Services vault region and Resource Group. We can review these details further and determine the next troubleshooting steps.

Please let us know once you have tested with the new Resource Group, or if the same error occurs there as well.