PROBLEM
The backup fails with a Microsoft VSS Error, "A problem with Windows Shadow Copy was detected":
If you check the Application event log within the VM, you'll find the following event at the same time of the failure:
Source: Application | Event ID: 12293
"Volume Shadow Copy Service error: Error calling a routine on a Shadow Copy Provider {74600e39-7dc5-4567-a03b-f091d6c7b092}. Routine details BeginPrepareSnapshot({3479c45c-424b-4132-8b6a-759f00e126f4},{57909294-8826-4034-b287-a6149517041f},\\?\Volume{ef4c2b9c-498f-11e4-8f1b-806e6f6e6963}\) [hr = 0x80070020, The process cannot access the file because it is being used by another process."
CAUSE
Pulseway's hard drive monitoring interferes with VSS and causes the backup to fail.
SOLUTION
Pulseway has an option to disable "Hard Drive Monitoring", this will allow VSS to run successfully within the virtual machine without causing the above error.
In some cases it was also seen that certain AntiVirus software was causing the same errors within the virtual machine.