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One reason for this is if a hosts file on the client/server machine has been modified/edited, and then saved with an extension e.g. in an editor such as WordPad which only allows it to be saved with an extension such as .txt or .doc. This will result in the Error Code 5 being raised by SilkTest as the host file is no longer valid with this extension, and communication with SilkMeter service is broken. To resolve this issue remove the .txt extension from the hosts file and the issue will be resolved.
See also Communication with license server failed.