Cannot create Application Pools after updating Visual Studio 2013

Symptoms
After creating a new website in IIS (and associated AppPool) all requests return a 503 and the Application Pool is stopped.

Event Logs will have something like:

Windows cannot copy file \\?\C:\Users\Default\AppData\Local\Microsoft\VSCommon\12.0\SQM\sqmdata-7696-039-00000.sqm to location \\?\C:\Users\[App Pool Name]\AppData\Local\Microsoft\VSCommon\12.0\SQM\sqmdata-7696-039-00000.sqm. This error may be caused by network problems or insufficient security rights.
DETAIL – Access is denied.

Fix
Navigate to C:\Users\Default\AppData\Local\Microsoft\VSCommon\12.0\SQM and delete any .sqm files within the folder.

Cause
This can be traced back to installing KB2932965 which is an update for Visual Studio 2013

By default IIS 8 creates a new user profile for every AppPool identity, it does this by copying the Default user profile. For whatever reason the update creates two .sqm files without setting any read permissions. When IIS attempts to copy the default user profile it fails because it doesn’t have read access. This in turns prevents the AppPool from starting correctly (although you’d never know from the IIS Management UI)

As far as I can tell these files are for customer satisfaction metrics, if you’re feeling particularly cautious don’t delete them, just give everyone read access (but delete them).

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