This occurs while overwriting a service (publishing). To overwrite the service, the system will first delete it and re-create it. The initial step of deleting the service has failed.
Check that the service is not being currently cached. Confirm that no other applications are using files in the cache folder for the service. The cache folder for the service can be found in the service configuration. Check the server logs for more details on the failure. If this is a hosted service in a portal, then the service in the hosted server couldn't be deleted.