VM Ware and Windows Server Swing Migration

My company is going to perform a swing migration in a VM Ware environment. . The current SBS 2003 server is running on a physical box. We are going to P2V the physical server and then stand up a 2011 swing migration between the 2 virtual guests.

The question: Will we have any issues assigning virtual CPUs, RAM, and hard disk space to Windows SBS 2011 once the swing migration is complete?
ableincAsked:
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Andrew Hancock (VMware vExpert / EE MVE^2)Connect With a Mentor VMware and Virtualization ConsultantCommented:
I'm afraid it's a breach of the Microsoft License Agreement to transfer an OEM version of the OS to new hardware.

The OEM version WILL NOT Activate on the new platform. (virtual version).

Original Equipment Manufacturers (OEM) versions

Note: Physical-to-virtual hard drive migration of a Windows installation is a valid function for customers with Software Assurance and full retail copies of Windows XP, Windows Vista, and Windows 7. Software Assurance provides users valuable benefits—please contact Microsoft Corporation for further information. Windows XP, Windows Vista and Windows 7 installed by Original Equipment Manufacturers (OEM) using OEM versions of these products may not be transferred to a virtual hard drive in accordance with Microsoft licensing terms.

Source
http://technet.microsoft.com/en-us/sysinternals/ee656415

http://www.experts-exchange.com/OS/Microsoft_Operating_Systems/Windows/XP/A_3721-Can-I-transfer-my-OEM-version-of-Windows-to-another-PC.html
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Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
is the SBS2003 server OEM? eg it came delivered with the server?
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ableincAuthor Commented:
Yes it's OEM. However, the 2003 server was P2V'd recently due to hardware issues. It's on standby. The 2011 SBS is not OEM.
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Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
I think you will need to leave it on Physical hardware and complete your migration.
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ableincAuthor Commented:
Hanccocka, so you are saying to perform the swing migration with the 2003 machine as a physical box to the 2011 VM. Would it then be legal?

Also, will we be able to reallocate resources (CPU, RAM, HD, etc.) once the migration is complete?
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Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
Yes, the issue is P2V of OEM does not work! The virtual machine will not Activate, so the VM is useless.

So, do not waste time P2V-ing the SBS2003 Physical machine and complete your Swing Migration from Physical SBS2003 to Virtual SBS2011.

You should have no issues in assigning CPU, RAM and HD to a virtual server.
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ableincAuthor Commented:
Okay, so I followed up with my boss. The 2K3 SBS server is going to run in the VM until the migration is done. He's already working with Microsoft on getting it reactivated since it's an OEM version.

Once the migration is done, we're going to shut down the 2K3 guest VM. At that point, we want to reallocate its resources (CPU, RAM, and HD space) to the new 2K11 server. Will there be any issues?

My initial thought is "No," but I'm not sure since it's 2011 and we don't have many in production.
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Andrew Hancock (VMware vExpert / EE MVE^2)Connect With a Mentor VMware and Virtualization ConsultantCommented:
There will be no issues.

Microsoft Licensing is the ONLY people that can assist with the OEM issue.
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ableincAuthor Commented:
I guess we are concerned that initially the 2003 guest will have say 1 core and the 2011 will have 3 cores. Once the migration is done and we turn off the 2k3 guest and reallocate that 1 core to the 2k11 machine (increasing the number of cores to 4), will Windows have any issues accepting the change in cores?
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Andrew Hancock (VMware vExpert / EE MVE^2)Connect With a Mentor VMware and Virtualization ConsultantCommented:
No issues, it has a multi processor HAL.
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