This issue is one that i’ve come across a few times and each time I forget the, surprisingly simple, solution. So I’ve decided to blog the solution to share with others. The symptoms are fairly obvious, the application event logs of your sharepoint servers are filled with event id 5401 with description “Trace service failed to create the trace log file at ‘some arbitary path'”.
So, the solution. As I said previously it is surprisingly simple to solve. Open up the services console and locate the Windows SharePoint Service Tracing Service and open the property pane for the service.
Next, open the “Log On” tab and under “Log on as:” select the local system account radio button .. that’s it … problem solved!!! Told you it was easy 🙂