The condition occurs when Exchange 2007 SP1 is in use, and the Exchange virtual directory target address is modified to redirect to the default OWA directory for webmail.
Follow the below steps in order to resolve this isuue:-
Step 1 From Administrative Tools, open Internet Information Services.
Step 2 Delete the Microsoft Exchange virtual directory in IIS.
Step 3 Review the warning that displays, and run the recommended cmdlet in the Exchange Management Shell (EMS) :
Step 4 Run this cmdlet in the EMS to ensure that the Exchange virtual directory is set up correctly and to add the directory again in IIS.
New-OwaVirtualDirectory -name exchange -OWAVersion Exchange2003or2000
Step 5 Wait for the Exchange server to populate the virtual directory into IIS.
Step 6 Restart the IIS.
Step 8 Ensure that you are prompted for a username and password. This indicates that WebDAV is enabled and configured correctly on the virtual directory. Enter your Active Directory credentials.
Step 9 Check the IIS logs that display for Cisco Unified Presence.
Step 10 If the logs indicate that there is a 401 authentication issue, add the domain to authenticate access.
Step 11 Restart the IIS.
Step 12 Select Cisco Unified Serviceability > Tools > Service Activation and restart the Cisco UP Presence Engine.
Step 13 Check the IIS logs again and verify that the SUBSCRIBE messages are present and correct for your calendar.