When configuring the ArcGIS Server account during an installation or upgrade of ArcGIS 10.1 and above, if a domain account is specified in the login settings, the following error message is received:
Domain user account domain\arcgis not found. 80070035: The network path was not found.
This error occurs when login rights are denied to the ArcGIS Server machine. The settings are denied if any of the following are true:
Depending on the cause, perform any of the listed solutions to resolve the issue.
Grant the ArcGIS Server account permission to connect to the domain
Configure the ArcGIS Server account to automatically log in to the domain account in Microsoft Active Directory. For more information, refer to ArcGIS Server: When using a domain account as the ArcGIS Server account.
Use the correct domain account format
During the installation process, ensure the ArcGIS Server account is configured following the format below:
Use a Windows local account as the ArcGIS Server account
If a connection cannot be established to the domain, use a Windows local account to configure the ArcGIS Server installation. For more information on using a Windows local account for ArcGIS Server, refer to Installation Guides: Which account should I designate as the ArcGIS Server account?
Disable UAC remote restrictions on the ArcGIS Server machine
Warning: The instructions in the link below include making changes to essential parts of the operating system. Esri recommends performing a backup of the operating system and files, including the registry, before proceeding. Esri cannot guarantee results from incorrect modifications while following these instructions. Exercise caution. Consult a qualified computer system professional if necessary.
Refer to Microsoft: How to disable UAC remote restrictions for steps.