I found this solution in the MSDN forum. I am merely posting it in my blog because I made this mistake twice and also I thought I should just document it here :-)

Problem:

You are building a Visual Studio package and using hosted build server to build your code. When you build you get following error.

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Cause:

I initially thought build server does not have VS SDK installed. However, thanks to the answer by Jeff in this forum question I was able to know the actual cause. I am quoting the below text from the forum answer

The TFS build service runs as a 64-bit process on a 64-bit machine, and the VS SDK always gets installed as 32-bit (to work with Visual Studio). Since the registry key that the build process needs is located under HKLM\SOFTWARE\WoW6432Node\Microsoft\VisualStudio\VSIP\11.0 the 64-bit build process looks for it in the wrong location.

Solution:

  • Open the build definition which is causing the issue and go to “Process” tab
  • Under the “Advanced” node, you will see “MSBuild Platform”
  • Change it from “Auto” to “X86”

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