Solution
This usually points to the fact that the vnes.bat file is being run from the incorrect install directory.
This can occur when a patch has been applied and the new install directory hasn't been deleted.
A patch or an upgrade process creates a new directory with the same number_1 or _2 depending on the number of upgrade/patches.
A sure way of finding this by checking the install folder of the Riverbed NetIM services via the services.msc