Had a similar issue with a conversion from Cloud service (classic) to Virtual machine scale set failing due to a custom tagging policy being enforced in the Azure tenant.
"So I contacted Microsoft, the fix is the manually revert back to CMG classic state inside SCCM console, and do the conversion again. Here are the steps:
1. Stop SMS Executive service
2. Run SQL query on your SQL Server: update azure_service set FQDN = 'xxx.cloudapp.net', DeploymentModel = '1'
3. Start SMS Executive service
4. Monitor cloudmgr.log, wait for CMG convert back to Classic"
I was able to use that SQL query to get my CMG back online in the Cloud service (classic) mode while I work through the security policy that is blocking my upgrade.
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Converting CMG to virtual machine scale set failed
in System Center Configuration Manager (Current Branch)
Posted