Key management services - volume activation of Windows 7

I have created a Server 2008 R2 box to be a key management services server. I have activated it with a "VOLUME_KMS_R2_B" key which is supposed to activate Server 2008 R2 and below as well as Windows 7 workstations.

I understand that I am supposed to have at least 5 servers or 25 workstations before the server starts to activate licenses. So I created 30 Windows 7 virtual devices using XenDesktop. I even used Volume Activation Management Tool (2.0) to ensure that all 30 have KMS keys and are pointing to the correct server (and yes DNS is set up correctly and DNS publishing is enabled).

Even after trying to activate 30 Windows 7 Professional machines, I still get the report that the count reported by your Key Management Service (KMS) is insufficient. PLease contact your system administrator.

Any ideas on why this won't activate Windows 7? There are no errors in any event log, only notes that an activation request has been processed.
flcbmadminAsked:
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David Johnson, CD, MVPOwnerCommented:
So I created 30 Windows 7 virtual devices using XenDesktop

After creating the first machine, did you run sysprep /factory and then shutdown the machine and then clone the 29 remaining machines?
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teomcamCommented:
When you clone your machines in virtual environment, you need to run sysprep to make each machine unique!
Just to confirm, have you;
1- Activated your KMS server by using KMS key! Note: I am not asking have you installed your KMS key! I am asking have you activated it by using slmgr.vbs /ato ?
2- Make sure _VLMCS appears under DNS!
3- Use the same VLAN initially!
4- Add DC's IP into client host file manually
5-Make sure firewall not blocking - Port 1688

After all it should work.
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flcbmadminAuthor Commented:
I did not run a sysprep /factory but willl give it a try now.

The posting for the blogspot is something similar but I found that the nslookup command it not correct. For nslookup to report I had to run these steps:

nslookup
set type=all
_vlmcs._tcp.<domain_name>
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flcbmadminAuthor Commented:
Have not done the host file yet....activation and all the rest...yes.

Trying the sysprep now though.
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flcbmadminAuthor Commented:
slmgr /rearm instead of the sysprep option did not work - there was no /factory switch to reset, but there was a link in one of above posts to rearm Windows 7...still tried to active all 30 and no luck and no errors in the event viewer either.
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teomcamCommented:
slmgr /rearm swicth will not help as it is irrelevant command to this issue. Rearm can be done 3 times in one client and it just extends trial period thats all.
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flcbmadminAuthor Commented:
Found the issue...the ISO image obtained from Microsoft's Volume License Center is not actually a volume license version of Windows 7 - go figure.

I downloaded a VL version off MSDN and used it - perfect...KMS activated with no issues.

I appreciate all the tech pointers and assistance.
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flcbmadminAuthor Commented:
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Windows Server 2008

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