Backup fails with "This feature requires paid Veeam Agent version"

Challenge

This error can present in two distinct ways:

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A failure during the Backup Job run:

Error: This functionality requires using paid Veeam Agent edition

 

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A failure during the [Agent discovery session]:

Error: Remote deployment and management is available for licensed agents only. Please change your backup server settings to allow managed agents to consume the license, then perform a protection group rescan.

Cause

This issue occurs when the software has not had ability to Allow unlicensed agents to consume instances enabled. This option is found at the bottom of Instances tab, in the License Information section. More information can be found here: https://helpcenter.veeam.com/docs/agentforwindows/userguide/manage_instance_consumption.html

Solution

To resolve this issue, the "Allow unlicensed agents to consume instances" option must be enabled.