To resolve the issue:
Check Windows Authentication on the Exchange server as follows:
1) Check that Windows Authentication is enabled on Exchange PowerShell virtual directory:
- Start Exchange management Shell and run the following command:
get-powershellvirtualdirectory -server | fl
2) If WindowsAuthentication appears as false, switch WindowsAuthentication to true:
get-powershellvirtualdirectory -server | set-PowerShellVirtualDirectory -WindowsAuthentication $true
Check order of authentication
There can be issues with the order of Authentication in the Powershell website. Ensure NTLM is first in order of Authentication for the Powershell website via the following:
1) Open a command prompt and run: inetmgr.
2) Expand your Website.
3) Click on Powershell.
4) In the view, select Group by: Area.
5) Under the IIS Section, double click Authentication.
6) Right-click Windows Authentication.
7) Select Providers...
8) Ensure NTLM is above Negotiate and Negotiate: Kerberos.