Unable to create a host connection to AWS EC2 and on-premises hypervisors (XenServer, VMWare, etc.) with invalid URL or authentication failure when a proxy has been configured for the Network Service account.

Ensure your connectors do not have any of the following configured:

• HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Windows\CurrentVersion\Internet Settings::ProxyEnable = 1
• HKEY_USERS\S-1-5-20\Software\Microsoft\Windows\CurrentVersion\Internet Setting
  Settings::ProxyEnable = 1
• Environmental Variable (HTTP_PROXY/ HTTPS_PROXY /ALL_PROXY)

Problem Cause

The DaaS service on Citrix Cloud utilizes the Cloud Connector to connect to AWS EC2 and on-premises hypervisors (XenServer, VMWare, etc.). By default, connections to the target hypervisor go directly from the connector to the target address. 

During the installation of the cloud connector software, administrators can configure the winhttp proxy settings. However, the RemoteHCL service on the connector does not use these proxy settings to connect to hypervisor endpoints.

If a GPO has been applied on the cloud connector that configures an IE Proxy for the Network Service account (either via an HKLM policy or a HKCU policy that targets Network Service) then traffic to the hypervisor address may inadvertently go through the configured proxy.