VSS Snapshots Fail with VSS_E_PROVIDER_VETO Error

A VSS snapshot sometimes fails with a VSS_E_PROVIDER_VETO error. The Windows application event log shows following error:

Volume Shadow Copy Service error: Unexpected error calling routine IOCTL_DISK_SET_SNAPSHOT_INFO(\\.\PHYSICALDRIVEx) fails with winerror 170. hr = 0x800700aa, The requested resource is in use.

This error is normally seen after working with host NICs, either adding or removing them or enabling or disabling them. After performing one of those operations, you need to be sure that the "Favorite" login definitions are correct.