When you install windows using SCCM OSD , sometimes an agent will comeback up and you wont be able to initiate software distribution or Updates . We face an issue where a newly deployed system kept showing this error , although the update did seem to have installed. "An error was encountered while attempting to install software updates" Updatedeploymnet.log showed this: InstallUpdates Initiated by user UpdatesDeploymentAgent 29-12-2015 12:22:17 1020 (0x03FC) Action not allowed in pause state UpdatesDeploymentAgent 29-12-2015 12:22:17 1020 (0x03FC) InstallUpdates failed, error 80040271 UpdatesDeploymentAgent 29-12-2015 12:22:17 1020 (0x03FC) Failed to initiate installation of updates, error = 0x80040271 UpdatesDeploymentAgent 29-12-2015 12:22:17 3280 (0x0CD0) In our case we have to stop SMS agent Host Service and then change the value of following keys to 0 in registry Registry Location: HKEY_Local_Machine\Software\Wow6432Node\Microsoft\SM