Hello Thejesh,
When you configure a Windows service to run under NT AUTHORITY\Network Service, the service process runs with a much more restricted token compared to LocalSystem. LocalSystem has almost unlimited privileges on the local machine, while Network Service is designed to run with limited rights and use the computer’s credentials when accessing network resources. If your service starts successfully under LocalSystem but fails under Network Service, it usually means the executable requires privileges or file system access that Network Service does not have by default.
The first step is to check the Windows Event Viewer under Windows Logs > System and Application for the exact service start error. Commonly you will see Error 1069: The service did not start due to a logon failure or Error 1053: The service did not respond to the start or control request in a timely fashion. If it is a logon failure, confirm that the service definition in your WiX installer uses the correct account string: NT AUTHORITY\NetworkService (note that the service account name must be NT AUTHORITY\NetworkService without a space). If it is a timeout or access error, you need to grant the Network Service account explicit permissions.
Check the directories and registry keys your service touches. For example, if the service writes to C:\ProgramData\YourApp or a custom log directory, ensure that NETWORK SERVICE has Modify rights on that folder. You can set this with icacls "C:\ProgramData\YourApp" /grant "NETWORK SERVICE":M. If the service needs to bind to a port below 1024 or access system resources, you may need to assign the SeServiceLogonRight and other privileges via Local Security Policy (secpol.msc) or ntrights.exe.
In short, the service is not broken; it is running into the expected restrictions of the Network Service account. Adjust your installer so that the account is specified correctly, and then grant the necessary file system and registry permissions to NETWORK SERVICE. Once those rights are in place, the service will start under Network Service as required by your security team.
I hope you've found something useful here. If it helps you get more insight into the issue, it's appreciated to accept the answer. Should you have more questions, feel free to leave a message. Have a nice day!
Harry.