Additionally to above article issue with "CreateDirectory Failed" could be caused by missing or corrupt certificate pair keys for computer or users located in C:\ProgramData\Microsoft\Crypto\RSA\MachineKeys or permission issues for user configured in IIS Application Pools - "WsusPool"
Required machine keys in C:\ProgramData\Microsoft\Crypto\RSA\MachineKeys
Publishing package from Software Vulnerability Manager will use WSUS Administration website available in Internet Information Services (IIS) on your WSUS server. Part of this website is "Content" which needs to have correct permission configured for successful package publishing.
To investigate if error 'CreateDirectory Failed' -2147467259 Publishing Error is caused by content location permission it is required to test settings for "Content" page on WSUS Administration website.
1. Open Internet Information Services Manager
2. Expand your server name - Sites and then highlight "Content"
3. In top right corner click on "Basic Settings". New window "Edit Virtual Directory" will be shown
4. Click on Test Settings
5. Make sure that Authorization test is successful. If failed then investigate cause of failure. WSUSPoll user in Application Pools needs to have access to your physical content folder or Machine Keys in C:\ProgramData\Microsoft\Crypto\RSA\MachineKeys are missing, corrupt or have permission issues.
To resolve issue please make sure that below permission are set for physical WSUS content folder and for shared folders:
Physical Content folder
NT AUTHORITY\NETWORK SERVICE
Share permission for WSUSContent and UpdateServicesPackages are set as below
NT Authority\Network Service
If issue is caused by missing/corrupt Machine Keys then restore your previous keys on this machine from a backup, Export/Import Keys from another server in the farm, or reinstall IIS to create new keys.