"Service vpxd-svcs pre-start command could not started" error while upgrading vCenter Server

Products

• VMware vCenter Server

Issue/Introduction

Symptoms:
When upgrading or installing vCenter Server with a local user account in the Hostname\Username format, you experience these symptoms:

• In the %TEMP%\vminst.log file, there are entries similar to:
  
  2016-11-16 11:08:04.709+09:00| vcsInstUtil-4602587| I: ParseStatusFile: curr error msg: "The installation of vCenter Server failed due to an internal error."
  2016-11-16 11:08:04.709+09:00| vcsInstUtil-4602587| E: ParseStatusFile: Displaying error message for "VMware vCenter Server": "The installation of vCenter Server failed due to an internal error.
   
• In the vcs_logs/uninstall/vc-HOSTNAME-TIMESTAMP-PID/ProgramData/VMware/vCenterServer/logs/vmon/vMon.log file, there are entries similar to:
  
  2016-11-16T11:08:04.594+09:00| vthread-5| I125: Run as User for service vpxd-svcs changed to Username@Hostname
  2016-11-16T11:08:04.651+09:00| vthread-5| I125: Received start for vpxd-svcs
  2016-11-16T11:08:04.652+09:00| vthread-5| I125: Load runstate service vpxd-svcs.json
  2016-11-16T11:08:04.652+09:00| vthread-5| I125: Constructed command : "C:\Program Files\VMware\vCenter Server/visl-integration/usr/sbin/cloudvm-ram-size.bat" -J vmware-vpxd-svcs -O C:\ProgramData\VMware\vCenterServer\data/vmware-vmon/vpxd-svcs.start.cmd
  2016-11-16T11:08:04.652+09:00| vthread-5| I125: Setting working dir of process to C:\Program Files\VMware\vCenter Server/vpxd-svcs/wrapper/bin.
  2016-11-16T11:08:04.666+09:00| vthread-5| E110: Failed to Logon as Username@Hostname user. Error: The user name or password is incorrect
  2016-11-16T11:08:04.666+09:00| vthread-5| E110: Service vpxd-svcs pre-start command could not started.

Environment

VMware vCenter Server 6.5.x

Cause

This issue occurs when the vpxd service 'logon as user' uses an account with a hostname\username format. 

In vCenter Server service, the vmon component uses User Principal Name (UPN) format to store the username. UPN is valid for any username@domainname domain account.
When using a user in hostname\username format that is converted to username@hostname, the UPN is not valid and causes the service to fail.

Resolution

To resolve this issue, use only the username or .\username for the user account when you are installing or upgrading vCenter Server.