Hello to all,I just wanted to share some issues we are having with KMS and VMware. First the background, we are a community college that has a volume license and campus agreement. As part of those agreements wehave both our MAK and KMS keys for Windows 2008 Server Enterprise, and Vista Business Edition.Iam now running4 x Windows 2008 64 Bit Standard Edition, 2 x Windows 2008 64 Bit Enterprise Edition, and 4 x Windows 2008 32 Bit Standard Edition servers all as virtual machinesin our 9 node VMware ESX 3.5 cluster.The serversare installed as a single forest with two domains, a parent and a child. I have installed and successfully activated the KMS server at the forest root.So now that sets the stage for the issue I have run into with KMS.KMS is successfully installed and DNS has the pointers to allow all machines to contact the server for activation. The issue is all the machines detect as virtual so I don't get credit towards having 5 physical machines. I do receive 1 credit for the KMS server even though it is virtual, but I still need 4 more credits to achieve the activation threshold. I have followed all the documentation as posted in another article from Tim Quan:********************************* Implementing Volume Activation 2.0 for Windows Vista and Windows Server 2008 http://technet.microsoft.com/en-us/library/cc511492.aspx Volume Activation 2.0 Technical Guidance http://www.microsoft.com/downloads/details.aspx?FamilyId=9893F83E-C8A5-4475-B025-66C6B38B46E3&displaylang=en *********************************I have also called theActivation Center 888-571-2048 and their suggestion was to use the MAK. I know I cando the MAK activation, but my point is we paid for10 Licenses asif we are running them on physical hardware, and we are being punished for running our system virtually. Currently I don't have any plans to deploy any physical instances of Vista (which would counts towards the required 5 count) or Windows 2008. Even if I did deployVista on 4 workstations, I don't want my web cluster (front-end for the entire college) to depend on 4 workstations to maintain their activation status. If those workstations got moved or shutdown for an extended period of time then it is my under standing that the servers would enter a state of reduced functionality, once the KMS Activation Status degraded for the KMS host.I know that going forward we will eventually have all 4000+ workstations migrated to Vista at some point, but that isn't planned for at least a 1-2 years. We have also been mandated torun all server related services ina virtual environment. I understand the reason the implemented a physical threshold is to prevent someone from installing a bunch of virtual environments and fooling KMS so they can pirate Windows. However with virtualization taking off, it is definitely a strike against Microsoft in the eduction system where there is already plenty of anti-Microsoft sentiment.I would be interested in hearing if anyone else has had similar experiences or thoughts. If there is a fix I am all for it!Thanks

We are also facing the same problem and unable to use KMS server for our windows 2008 servers ... we are getting punished for using virtualization technology ..We have decided to stick to windows 2003 platform unless microsoft chnage their policy.