If you happen to encounter this error when installing SQL Server 2012 Master Data Services, you may have missed an IIS prerequisite feature, or you may not be using the right Windows user for the MDS application pool identity.

When configuring the website (using the MDS configuration manager) you can specify whatever Windows user you like, but that apparently doesn’t mean that just any user will work, even though the tool seems to try to do the right thing. The documentation seems to say that you must use the “service account” specified when creating the MDS database. The only problem with that is that I didn’t see any mention of such a service account during database configuration.

What did work for me was to use the “administrator account” that was supplied when creating the database. Whether there are security issues connected with doing so, I don’t know — I am currently working with a development server and it really doesn’t matter. I will add a note here if and when I find out for sure.

By the way, you can change the MDS administrator account, although not using the configuration tool. The steps are described here. It looks like this is yet another instance where it would be a good idea to use a “generic” account for this function, non-expiring and with a strong password. If you do that, you shouldn’t need to change it.

Update (7/8/12):

Another cause of this error, apparently, is if the permissions for the MDS web.config file are lost. The file needs to have read permissions for <machinename>MDS_ServiceAccounts (where <machinename> is the name of the server). If this entry is missing from the file ACL, add it. I think it disappeared after I installed SQL Server 201s Cumulative Update 1. (I was trying everything to make MDS work.)

Update (6/22/12):

The problem returned after installing CU2. Same workaround — restore web.config permissions.

Update (10/18/12)

The web.config permissions problem appears to be fixed as of CU4.