Problem
When running the BizTalk Server configuration program on a domain controller, configuration fails if you specified a local group (for example, BizTalk Host Users Group) for either the BizTalkServerApplication host or the BizTalkIsolatedHost host.
Cause
A domain controller automatically treats a local Windows group as a domain Windows group (there is no such thing as local Windows group on a domain controller). If you specified a local Windows group for the host while running the configuration program, configuration will fail when trying to create a SQL Server logon for the group. The configuration program does not disable the local Windows group option when the server is a domain controller.
Resolution
Specify domain groups for the hosts that are created during configuration.