Go to Application pools and choose the one used by your WordPress Blog.
Right Click and choose Advanced Settings…
Change the Identity to LocalSystem
Click OK to save changes.
Then on Sites,
Choose your WordPress Blog from the sites list
Right Click on it and click on Edit permissions
Go to security tab and click on Edit… (Group or user names)
Click on add and type “Authenticated users”
Click on Check Names to validate the username
Click OK to save changes.
With that, WP should update without the need of using FTP. Basically you just give read/write permission to an authenticated user… WP is running as a LocalSystem User.
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