Environment
Novell ZENworks 10 Configuration Management with Support Pack 1 - 10.1
Situation
403 on system update service due to misconfigured proxy can cause system update not to failover to available closest server on list.
Resolution
This is fixed in version 10.1.1 - see KB 7001406 "ZENworks 10 Configuration Management 10.1.1" which can be found at https://www.novell.com/support
Workaround: Fix third party proxy authentication rules to allow traffic to ZENworks port.