The server is Windows Server 2012 R2 on a VM instance on Azure. There is no DC in the environment and the account in question is Local Administrator.
When I remote onto the box I use the local admin account and RDP successfully. I also have a web app on the same box which uses windows authentication. When I access the web app from an external machine & authenticate using this account - all works fine.
However, when I access the web app on the local machine when I enter the credentials at the challenge, it is refused - 3 strikes and 401.
I can see in the event viewer that the Audit Failure shows no Account Id:
Account For Which Logon Failed: Security ID: NULL SID Account Name: *** Account Domain: ***
Any help gratefully received, even if to get more data on the error.