"The system administrator has set policies to prevent this installation" error when installing VMware Tools on a Windows Guest (1016563)

• Installing VMware Tools on a Windows guest fails.
• You see the error:
  The system administrator has set policies to prevent this installation 

• This error may occur twice if you are logged in twice as the same user on system. For example, you may see this error twice if you are logged in locally from the console and logged in through a Remote Terminal Service session.

Cause:

On Windows guests, installing VMware Tools installation may fail if the Windows Software Restriction Policy is set to disable the Windows installer.

In some instances, Windows silently changes the Windows Software Restriction Policy without notifying the user.

Solution

To resolve this issue, enable the Windows installer setting in the Windows Software Restriction Policy.

Note: Enabling this setting may change the installation behavior for other third-party software.

To enable Windows installer in the Windows Software Restriction Policy:

1. Click Start > Run.

2. Enter gpedit.msc.

3. Click Local Computer Policy > Computer Configuration > Administrative Templates > Windows Components > Windows Installer.

4. Click Disable Windows Installer.

5. Click Display Properties > Enabled.

6. Set the Disable Windows Installer drop down to Never.

7. Drill down to Computer configuration > Windows Settings > Security Settings > Software Restriction Policies.

8. Right-click Software Restriction Policies and click Create New Policies.

9. Right-click Enforcement, and click Properties.

10. Click All users except local administrators.

11. Click OK . Close Group Policy

12. Open a Command Prompt then run the following command

    • gpupdate /force 

13. When local group policy is finished updating, re-run the Tools setup.