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A virtual machine deployed from template or cloned fails to ping outside network with the error: Unable to contact IP driver (2016747)

A Windows 2008 virtual machine either deployed from a template or cloned cannot ping outside the network.
You see the error:
Unable to contact IP driver. General Failure
nslookup fails with the same error.

The issue is caused by a duplicate SID. The guest customization option is not selected while deploying the virtual machine.

To resolve this issue:

Open a command prompt in elevated mode. Right-click on it and select Run as administrator.
Change the path to C:\Windows\System32\sysprep.
Run the sysprep command and select the defaults.
Reboot the virtual machine.

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