Symptoms

Issue:
K2 for SharePoint - uploading files larger then 1.5 MB - "The remote server returned an error - 401 Unauthorized" error is thrown
 

Diagnoses

Diagnosis:
The necessary permissions were given to the K2 Service account, however the issue still occurred. The issue also occurred with various users, the issue only occurred if the file was bigger than 1.5MB. We made sure the relevant settings and permissions were correct within the Internet Information Services manager. We were also able to reproduce the issue directly with the SharePoint 2013 Smartobject within the SmartObject Services Tester Tool.
 

Resolution

Resolution:
A K2 product issue was the cause of the problem - a codefix was provided by the developers.